Chile’s GDP had its biggest increase in two years and the economy is beginning to grow again

Chile’s GDP had its biggest increase in two years and the economy is beginning to grow again
Chile’s GDP had its biggest increase in two years and the economy is beginning to grow again

An operator at a copper refinery in Ventanas, Chile. The mining sector was the one that recorded the greatest growth.

(From Santiago, Chile) Good news for the Chilean economy. He central bank published this Monday its report “National Accounts of Chile: Evolution of economic activity in the first quarter of 2024,” in which it announced that the Gross Domestic Product (GDP) of the country expanded 23% during the first quarter of this year, compared to the same period in 2023.

The figure is not minor, since it is the highest GDP growth since the second quarter of 2022, when the indicator scored a 4.4%.

The Minister of Finance, Mario Marcel, celebrated the news by pointing out that “it confirms that we have had a good start to 2024 from an activity point of view. These are figures in both the annual and quarterly comparison. very positive, and with this the growth expectations for the whole year are validated,” he said from La Moneda, according to a note from El Desconcierto.

Thus, domestic demand increased by 2%, reflecting “a increased consumption and investment“, while “exports and imports of goods and services showed increases, with a net upward effect on GDP growth.”

According to the study, “a large part of the activities exhibited positive figures,” with the miningelectric energy, gas and water services, as well as the transportation area, which “presented the greatest upward effects.”

Business services, fishing and construction, however, did not have blue numbers. “In seasonally adjusted terms, the acceleration of GDP was supported by mining, commerce, transportation and business services activities,” stated the Central Bank.

In the breakdown, agricultural-forestry activity grew by 1.1%. Same figure for the manufacturing industry due to greater production of pulp and paper.

The activity supply of electricity, gas, water (EGA) showed a strong advance of 17.8% in the first three months, led by electricity generation.

And although he mining sector grew by 7.0% due to the extraction of copper, and to a lesser extent non-metallic minerals, Valentina Apablazaanalyst at the Economic Context Observatory of the Diego Portales University, said that what is observed is a “transverse growth”.

“Growth is strongly driven by the mining sector, however, we see that even without considering this sector, The economy is growing thanks to the good performance of electricity generation, transportation and the manufacturing industry,” said Apablaza.

Meanwhile, the manufacturing industry reported falls. fishingwhich showed a decline of 10.7%due to lower fish landings and a drop in aquaculture harvests.

The activity of the construction showed a decrease of 1.1%, due to lower activity in specialized services and commerce also decreased by 0.4%.

Last week the government raised the 2.5% to 2.7% its national GDP growth projection for this year due to the good data for the first quarter and an expected higher price of copper, the country’s main export.

The projections for GDP expansion this year are within the range of between 2% and 3% set last April by the Chilean Central Bank, which also raised the forecast for inflation until the 3.8%.

Chile recovered faster than expected after the pandemicwith a historical increase of GDP 11.7% in 2021, but in 2022 it began to slow down and closed with a growth of 2.4%. Contrary to what was forecast, in 2023 the contraction was avoided and the GDP closed with a timid growth of the 0.2%.

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