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Chile Economy Grew 6.5% in Quarter, Beating Estimates

Aug. 18 (Bloomberg) -- Chile’s economy expanded 6.5 percent in the second quarter from a year ago, the biggest increase in five years.

Chile’s second-quarter current account surplus was $46.8 million, according to data published today on the central bank’s website. The economy expanded more than the 6.2 percent median estimate of 12 economists in a Bloomberg survey.

Central bank economists said in a note to policy makers last week that monthly economic growth data indicated the economy had grown 6.2 percent in the second quarter. Chilean output is approaching levels before a Feb. 27 earthquake that caused an estimated $30 billion in damage, the economists said.

Chileans increased consumption following the quake with retail sales growing 18 percent in June, 19 percent in May and 22 percent in April from the previous year, the National Statistics Institute said.

Chile’s finance and electricity industries also led growth in the second quarter, Aldo Lema, chief economist with Banco Security in Santiago, said in an Aug. 16 note e-mailed to clients. The economy will grow more than 5 percent in 2010 and 6 percent to 7 percent in 2011, Lema said.

Economic growth could reach 7 percent in the second half of the year as reconstruction works boost the construction and transport industries, Santiago-based consulting company Gemines Consultores said in its August report.

Policy makers in their latest monetary policy report, published in June, predicted Chile’s economy would grow 4 percent to 5 percent this year.

“Domestically, available data show significant output and demand dynamism, beyond what was foreseen in the latest monetary policy report,” policy makers said in an Aug. 12 statement.

Chile’s peso strengthened beyond 500 per U.S. dollar, gaining 0.6 percent to 499.25 at 8:38 a.m. New York time, from 502.25 yesterday. The currency rose for a fifth straight day.

To contact the reporter on this story: Randy Woods in Santiago at rwoods13@bloomberg.net

To contact the editor responsible for this story: Joshua Goodman at Jgoodman19@bloomberg.net

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