Chile 2012 Economy Grew Faster Than Forecast on Mining Boom

Chile’s gross domestic product expanded faster than forecast last year as a boom in the mining and real estate industries boosted investment and sparked an increase in consumer spending.

GDP grew 5.7 percent in the fourth quarter from 2011, the central bank said in a report on its website today, exceeding analyst estimates of 5.6 percent. The economy expanded 5.6 percent in all of 2012, compared with the 5.5 percent forecast by policy makers in December for the world’s top copper producer.

Copper prices exceeded central bank forecasts in 2012, fueling an increase in mining investment as companies such as BHP Billiton Ltd. and state-owned Codelco build new production capacity. The mining boom has fueled near full employment and stimulated consumer spending, helping delay an economic slowdown until 2013, economist Sebastian Senzacqua said.

“Last year turned out to be positive for our economy,” Senzacqua, an economist at Bice Inversiones, said by phone from Santiago. “The economy should decelerate this year, although it probably will be a healthy slowdown without an abrupt moderation. It will slow toward its potential growth rate that is closer to 5 percent.”

Economic growth exceeded analyst estimates in nine separate months last year as retail sales expanded more than three times faster than manufacturing. Private spending grew 7.3 percent in the fourth quarter, while investment increased 18 percent, according to today’s report.

Growth Outlook

GDP will expand 4.75 percent this year, surpassing the average for Latin American nations by more than one percentage point, according to analysts polled by Bloomberg. The economy as measured by the Imacec index, which is a proxy for GDP, increased 6.5 percent in the first month of the year.

Imports surged 4.9 percent in 2012 as consumers stepped up purchases of foreign-made goods, according to the report. Exports increased 1 percent as copper prices averaged $3.64 a pound, exceeding the central bank forecast by $0.03. The current account deficit expanded to $9.5 billion from $3.3 billion in 2011.

The peso, which has gained 2.1 percent against the U.S. dollar in the past 12 months, fell 0.2 percent to 472.48 per dollar at 9:59 a.m. local time.