GDP reading: GDP growth moderated to 0.4% on a seasonally adjusted quarter on quarter basis in the final quarter of 2024 from 1.5% in the third quarter. The figure was in line with the estimate derived from monthly economic activity data. On an annual basis, economic growth accelerated to 4.0% in Q4, up from the previous period’s 2.0% increase.
Drivers: Private consumption growth improved to 0.8% seasonally-adjusted quarter-on-quarter in Q1 (Q3: +0.1% s.a. qoq). Public consumption dropped 4.7% (Q3: +1.7% s.a. qoq). Fixed investment growth fell to 0.7% in Q4 (Q3: +1.1% s.a. qoq).
On the external front, exports of goods and services contracted 1.1% in Q4 (Q3: +3.2% s.a. qoq). Conversely, imports of goods and services growth sped up to 5.7% in Q4 (Q3: +2.1% s.a. qoq).
GDP outlook: Our Consensus is for a slight acceleration in GDP growth in Q1 from the Q4 outturn, boosted by past interest rate reducations.
Panelist insight: On the reading, Itaú Unibanco analysts said:
“Leading indicators of upbeat capital goods imports and improving business sentiment, along with elevated copper prices, improving credit dynamics and consumer tourism place an upside bias to our 2.3% 2025 GDP forecast. Improved activity dynamics will likely lead the BCCh to report a closed, or slightly positive, output gap.”
Goldman Sachs’ Sergio Armella said:
“After today’s reading, we revised up our real GDP growth forecast for 2025 to 2.4% from 2.2% before. We note that private consumption growth accelerated in the fourth quarter and gross fixed capital formation remained firm. Government consumption, amid a need to consolidate spending, dragged final domestic demand down. All in all, in our assessment, the output gap remains around zero which should limit demand side inflationary pressures.”
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