Chilean economy falls in the fourth quarter, but advances 2.4% in all of 2022: Central Bank

The Chilean economy registered a fall in the fourth quarter amid an expected adjustment after the rapid recovery from the impact of the coronavirus pandemic. COVID-19caused by a restrictive monetary policy to contain inflationary pressure.

According to data from the Central Bank released on Monday, the Gross Domestic Product (GDP) it yielded 2.3% between October and December, while the market expected a decline of 1.6%.

Despite this, local activity managed to close all of 2022 with an advance of 2.4%.

at annual level “The result was led by services, particularly personal, business and transportation. In contrast, the production of goods exhibited a drop, with mining and the manufacturing industry having the greatest incidence in this result”.

“The growth of domestic demand in the first half of the year, driven by consumption, and its subsequent slowdown in the second part of the year stood out”he added.

Meanwhile, seasonally adjusted GDP advanced 0.1% in the fourth quarter.

“GDP increased marginally in the last quarter compared to the previous period, an increase led by an acceleration in mining and trade activities, an effect almost entirely offset by a reduction in transportation,” stressed.

“The weaker-than-expected seasonally adjusted 0.1% expansion in Chile in the fourth quarter of last year confirms that high inflation and tight monetary policy are taking a heavy toll on the economy,” said Capital Economics in a report.

He added that although the outlook for the economy has improved due to better expectations regarding the price of copper, the benefits will be outweighed by accelerated inflation, restrictive rates and uncertainty about the new Constitution, with which GDP would contract by 0.5% this anus.

The finance minister, Mario Marcel, He highlighted that quarterly behavior was partly influenced by adjustments due to the process of exiting LATAM Airlines bankruptcy protection, which had a one-off effect, so the worst moment for activity was during the third quarter.

“This indicates that in reality the adjustment that occurred in the economy was somewhat deeper than what had been seen so far in the Imacec data, but that it has already occurred and therefore now the economy is beginning to head towards a path of recovery.” recovery and at the same time with downward inflation”he claimed.

For its part, domestic demand plummeted by 7.6% in the last quarter of last year, but ended 2022 with a rise of 2.3%.

The Central Bank also reported the revision of certain GDP and Imacec figures between 2020 and 2022, including that last year’s annual GDP grew at a rate three tenths lower than that estimated from the Imacec closure.

“This review was mainly explained by the incorporation of information in the fourth quarter, which affected the estimate of added value of transportation services”said.

The agency also reported that in 2022 the current account registered a deficit of US$ 27,102 million, equivalent to 9.0% of GDP.

“The result was explained by the income from foreign investment in Chili and the deficit of the trade balance of services; meanwhile, the trade balance of goods was positive”, detailed.