|
Economic
growth in third quarter slightly better than expected
In the third
quarter, gross domestic product (GDP) expanded by 6.8% over the same
quarter last year. The final data came in slightly ahead of the 6.5%
growth based on the preliminary monthly data published last month.
The difference is mainly due to an upward revision of growth data for July
from 4.5% reported earlier to 5.3%. The third quarter growth was
well ahead of the 5.3% annual growth registered in the second quarter and
was in fact the fastest pace since 1997. Moreover, seasonally
adjusted data corroborate the resilience of the economy, as activity
advanced 2.04% over the previous quarter.
Buoyant
domestic demand accounts for acceleration in economic growth, as
contribution from external sector remains stable at high level
The acceleration observed in the third quarter was mainly due to stronger
domestic demand, while the external sector continued to provide the same
strong contribution registered in the previous quarter. Growth in
domestic demand accelerated from a 5.4% pace in the second quarter to 8.6%
in the third. The acceleration was due largely to increased
investment activity, whereas consumption and inventories – the Central
Bank only publishes joint data for the quarter – accelerated from 4.7%
annual growth to 6.9%. Gross fixed investment, on the other hand,
almost doubled from the already strong 7.7% pace to a 14.0% expansion in
the third quarter. The improvement was due to a further pickup in
investment in machinery and equipment, which continued the accelerating
trend observed since last year. In the third quarter, investment in
machinery and equipment grew by 25.1%, almost twice the 13.6% pace
observed in the second quarter. Investment in construction and other
works, on the other hand, grew at a lesser pace but actually more than
doubled the 3.0% second quarter expansion, as growth came in at 6.2%.
Finally, exports of goods and services added 15.3% (Q2: +9.8% year-on-year)
and the pace of imports doubled to 20.5% from 10.3% in the second quarter.
Mining
and manufacturing industry accelerate further in third quarter
Fishing was the fastest growing sector in the third quarter with a 14.8%
expansion. However, despite the impressive growth rate, the reading
actually represents a slowdown compared to the 24.8% growth registered in
the second quarter. In fact, the third quarter acceleration in
economic growth was mainly the result of faster growth in construction,
manufacturing and mining. Mining added 9.1% over the same quarter
last year, following on a 6.4% expansion in the second quarter. The
sector continued to profit from solid output growth in both private and
state-owned copper mines. Strong global demand, high copper prices
and the ramping up of new mining operations are behind the resilient
growth of the sector. Output of other minerals, in contrast, is
actually contracting, with the notable exception of iron. Industrial
manufacturing, the most important sector of the economy, constitutes the
other pillar of economic growth. In the third quarter, industrial
manufacturing accelerated from the resilient 6.1% pace observed in the
second quarter to 8.8% growth in the third, led by intermediate goods and
followed by consumer and export goods. Construction added 6.5% over
the same quarter last year, and thus registered the strongest acceleration
in percentage points over the previous quarter, when the sector expanded a
paltry 3.0% even though sub-par growth in industrial building activities
offset the major dynamism in housing and commercial building. In the
service sector, commerce, restaurants and hotels stood out with a 8.1%
year-on-year expansion, following on 7.8% growth in the second quarter.
Economy
slows in October
In October, economic activity slowed compared to the resilient 7.7% pace
observed in September but remained robust. According to the monthly
indicator for economic activity (IMACEC, Indicador Mensual de Actividad
Económica), the economy expanded 5.8% in October compared to the same
month last year. The result was below the Consensus Forecast, which
had anticipated the economy to grow by 6.2%. However, a
month-on-month comparison suggests an even stronger growth than indicated
by the annual figure. According to seasonally adjusted data, the
economy added 0.84% over the preceding month, following on a 1.00% monthly
expansion in September. The slowdown was due to industrial
production, where growth came in at 5.2% - just half the unsustainable
12.0% pace registered in September. Moreover, unemployment dropped a
paltry 0.3 percentage points to 9.4% in the moving quarter up to October
compared the third quarter.
|
