(Reuters) – Chile’s economy experienced a slight expansion of 0.1% in the fourth quarter of 2023 compared to the previous quarter, according to data released by the country’s central bank on Monday, a figure slightly below market consensus.
The Gross Domestic Product (GDP) of Chile, the world’s most prolific copper producer, also witnessed a 0.4% year-on-year increase, surpassing the median forecast of a 0.2% rise.
The quarter-on-quarter GDP growth was driven by improvements in personal services and transportation sectors. Conversely, a decline in mining activities partially offset the annual growth, the central bank reported.
For the entire year of 2023, Chile’s economy recorded a 0.2% expansion from the previous year. The central bank primarily attributed this GDP growth to positive contributions from personal services, EGA, and transportation. In contrast, the trade sector posed a significant downward impact on the 2023 GDP.
In December 2023, the Chilean central bank had revised its forecast, predicting the country’s GDP to remain flat for the year, a modification from its earlier prediction of a contraction of 0.5% to zero growth.
In a bid to stimulate the economy, the central bank initiated a cycle of monetary easing in July 2023, with a larger-than-expected rate cut of 100 basis points. Subsequently, in January, the bank cut another 100 basis points, reducing the rate to 7.25%, indicating its perception of decreasing inflationary pressures.
(Reporting by Natalia Ramos and Natalia Siniawski; Editing by Toby Chopra)
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