Chile’s economic growth accelerated to 4.7 percent in the third quarter, more than analysts expected, driven by rising copper output and what the central bank expects to be the last stages of a retail sales boom.
Year-on-year growth picked up from a revised 4 percent in the previous three months, the central bank reported on its website today, and compared with the 4.4 percent median estimate of 14 analysts surveyed by Bloomberg. Gross domestic product expanded 1.3 percent from the previous three months.
The copper industry expanded 9.1 percent from a year earlier in the world’s largest producer of the metal, while the retailing industry grew 7.3 percent, according to the central bank. With consumer spending and investment starting to ease, the central bank cut its benchmark interest rate by a quarter point to 4.75 percent on Oct. 17.
“We probably won’t see growth of this magnitude again until 2015, when the affects of monetary easing will be felt,” Fernando Soto, senior economist at Banco Bilbao Vizcaya Argentaria SA in Santiago, said before today’s announcement.
Retail sales growth slowed to 7 percent in September from a year earlier, the slowest pace this year, while manufacturing unexpectedly contracted 1 percent over the same period, the National Statistics Institute reported on Oct. 29.
The ruling alliance failed to capitalize on its economic record in yesterday’s presidential elections, with its candidate Evelyn Matthei winning 25 percent of votes against 46.7 percent for the opposition’s Michelle Bachelet. The two candidates will face each other in a runoff vote on Dec. 15.
Domestic demand rose 1.3 percent in the third quarter from a year earlier, compared with 4.1 percent in the previous three months. The increase was led by consumer spending, which gained 5.3 percent, principally on durable goods, which gained 11.6 percent.
Investment growth slowed to 3.2 percent in the third quarter from 8.6 percent in the previous three months. It was the smallest increase since the fourth quarter of 2009.
Rising domestic demand pushed the current account deficit to $3.44 billion in the third quarter from $1.63 billion in the previous three months, the central bank said. The shortfall was down from $4.9 billion in the same period last year.
The decline in the deficit “reflects a slowdown in domestic demand, rather than a recuperation in exports,” Soto said in an e-mailed reply to questions.
Central bankers cited weakening domestic demand and a slowing economy for last month’s rate cut. The bank had previously reduced its growth forecast for this year to between 4 percent and 4.5 percent from 4 percent to 5 percent.