Chilean Economic Activity Expands at Fastest Pace of 2019

(Bloomberg) --

Chile’s economic activity grew in July at the fastest pace in eight months on stronger mining and manufacturing output, boosting prospects for economic recovery in the second half of the year.

The Imacec index, which is a proxy for gross domestic product, rose 3.2% in July from a year earlier and 0.2% from the previous month, according to a report published Thursday by the central bank. The median estimate from analysts in a Bloomberg survey was for a 3.3% annual gain.

Key Insights

• Slowing consumer and external demand and sluggish mining output weighed on economic growth in the second quarter, leading the government to announce stimulus measures last month
• Chile’s central bank cut its overnight rate Tuesday for the second time this year and left the door open to additional stimulus, saying economic data suggest it will take longer than expected for inflation to converge to target
• Chile’s central bank cut its 2019 growth forecast for their third time this year to between 2.25% and 2.75% from 2.75% to 3.5%, according to the quarterly monetary policy report released Wednesday

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• Mining output rose at an annual pace of 0.5% in July, reversing a contraction in the first half of 2019, while manufacturing expanded at the fastest pace this year.

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