Nov. 9 (Bloomberg) -- Chile posted a trade surplus of $881 million in October after exports expanded to the most in 12 months, the central bank said today on its web site.

Exports rose to $4.7 billion from $4.5 billion last month, while imports totaled $3.8 billion, the highest this year, the bank said.

Chile’s trade is rising after the price of its main export, copper, more than doubled this year and consumer spending recovered. In the first three weeks of October, imports of durable consumer goods such as cars and washing-machines were 5.5 percent lower than the same period a year earlier, the shallowest decline of the year.

“Imports are still pretty low,” said Jorge Selaive, chief economist at BCI Corredor de Bolsa. “We’re exporting more copper and at higher prices so the balance is positive, but industrial exports remain low.”

Chile’s economy may be starting to recover after shrinking year-on-year in the first three quarters of this year, according to data from the central bank. The global economic slump lowered prices for Chilean exports, and domestic spending dropped, as banks cut back on lending, retailers ran down inventories and companies stopped investing.

Consumption

Slowing consumption led to a collapse in imports, which dropped 40 percent in September from a year earlier. Imports in October declined 29 percent from a year earlier, the smallest drop since January.

“The numbers are better year-on-year, but they are still showing only a gradual pace of recovery in demand,” said Alejandro Cuadrado, an economist at Bank of America Merrill Lynch in New York.

Exports declined 3.2 percent from the same month a year earlier. Sales abroad had increased year-on-year in September, after posting double-digit declines for 12 straight months.

The price of copper increased to $2.99 per pound today from $1.40 at the end of last year, bolstered by record first-half imports into China. Chilean President Michelle Bachelet will this month visit China, the biggest consumer of the metal, and South Korea, the second-biggest, she told reporters on Nov. 4.

Chile’s peso advanced 1.7 percent to 14-month high of 512.5 per U.S. dollar today at 12:44 p.m. New York time today.

To contact the reporter on this story: Sebastian Boyd in Santiago at sboyd9@bloomberg.net

Last Updated: November 9, 2009 12:45 EST