Chile’s economy grew more than analysts expected in March as expansion in the services industry offset a contraction in manufacturing.
The Imacec index, a proxy for gross domestic product, rose 1.6 percent from a year earlier, the central bank said on its website Tuesday. The median forecast of 22 economists surveyed by Bloomberg was for a 1.1 percent increase. In the month, the Imacec contracted 0.3 percent as heavy rains in the north closed copper mines.
“The negative effect of the bad weather will be short-lived and we expect the mining sector to recover gradually,” Andres Abadia, senior international economist at Pantheon Macroeconomics Ltd. in Newcastle the U.K., said in an e-mailed note. “Elsewhere, activity was supported by higher value-added services.”
Policy makers in the South American nation have held the key interest rate unchanged since October, stuck between slower growth and above-target inflation. Manufacturing contracted 2.8 percent in March from last year, while retail sales rose 0.4 percent, the worst performance this year, according to a separate report last week.
While Abadia said weaker growth in the first quarter was “just a blip,” other analysts took a more negative view.
“Some variables that were showing a recovery like industrial production and consumption are falling again,” said Alejandro Alarcon, an economist at the Universidad de Chile in Santiago. “We are in a process of deceleration of the two principal drivers of economic activity: consumption and investment.”
Growth in the world’s largest copper producer will accelerate to 2.9 percent this year, exceeding the Latin American average by more than 2 percentage points, according to economists surveyed by Bloomberg.