Chilean economy grew 0.2% in 2023, driven by energy, gas and water

The Gross Domestic Product (GDP) of Chili It grew 0.2% in 2023, a performance much lower than that of 2022 (2.8%), although better than expected, due to the fall in trade activity, the Central Bank (BC) reported this Monday.

”During the year 2023, economic activity increased 0.2% in annual terms,” the BC said through its National Accounts report. The annual figure is higher than expected by the market, which had forecast -0.2%.

This variation “was determined, mainly, by the positive contribution of EGA (electricity, gas and water), personal services and transportation. In contrast, trade was the main downward impact,” said the issuing entity.

The contraction in trade, of 3.5%, was determined by the “retail component and, to a lesser extent, by the automotive component,” he said.

The 2023 GDP indicator is part of the stabilization after the effects of the covid-19 pandemic, which in 2020 led the Chilean economy to fall by up to 5.8%.

Even in 2021, there was an excessive expansion of 11.7%, driven by economic aid and early withdrawals from pension funds to alleviate the situation generated by the coronavirus crisis.

Mining also showed red numbers. “Although a large part of the mining activities exhibited positive figures, the drop in copper production determined the result of the sector, which decreased 0.3%,” said the Central Bank.

With almost a quarter of the world’s supply, equivalent to about 5.2 million metric tons annually, Chile is the world’s largest producer of copper.

In addition, it is the second global producer of lithium, a key light metal for the manufacture of batteries for cars, cell phones and various electronic items.

The South American country’s exports fell 0.3% in the year, “mainly due to lower shipments of goods, highlighting those of copper and wooden boards and panels,” said the BC statement. Imports contracted 12%.