Chile: Central Bank revealed that the GDP grew more than expected in Q4 2023

The economy surprises with a 0.2% expansion throughout 2023.

Chile’s Gross Domestic Product (GDP) grew by 0.4% year-on-year in the fourth quarter, resulting in an unexpected increase of 0.2% for the entire year 2023, as reported by the Central Bank on Monday in the National Accounts. Both figures exceeded expectations.

On the other hand, domestic demand declined by 2.5% in the fourth quarter and fell by 4.2% throughout 2023, mainly influenced by a contraction in household consumption.

At the same time, the Central Bank explained that regarding the preliminary figures published in the Monthly Economic Activity Index (Imacec) for the year 2023, the annual variation of GDP was revised upwards from -0.2% to 0.2%.

“This revision was mainly explained by the incorporation of information not available for previous estimates and the reconciliation process of the supply and utilization tables of the quarterly National Accounts,” the report reads.

On the other hand, household consumption decreased by 5.2%, primarily due to a decline in spending on non-durable goods—particularly clothing and food—and durables, to a lesser extent. Conversely, spending on services increased, driven by transportation services and restaurants and hotels.

Another area that showed a weak performance was investment, which declined by 5.3% “due to a reduction in inventories—especially industrial goods—reaching -0.8% of GDP.” Gross fixed capital formation (GFCF) decreased by 1.1%, attributed to lower investment in construction and machinery and equipment.

Regarding foreign trade, both exports and imports of goods and services declined, with a net positive effect on GDP, as reported by the Central Bank.

“The decline in exports (-0.3%) was mainly due to lower shipments of goods, particularly copper and wood boards and panels. In contrast, service exports increased,” the report reads.

Meanwhile, government consumption increased by 1.7%, driven by an expansion in spending on education and health services.

On the other hand, in the Central Bank’s traditional review, the growth figures for 2021 and 2022 were revised downward, from 11.7% to 11.3% and from 2.4% to 2.1%, respectively.

ABOUT THE AUTHOR See More

Ignacio Teson

Economist and Financial Analyst

Ignacio Teson is an Economist and Financial Analyst. He has more than 7 years of experience in emerging markets. He worked as an analyst and market operator at brokerage firms in Argentina and Spain.

Mexican Peso Drops Sharply Against the Dollar as Oil Prices Surge

4 months ago

Save

Copper Defies Gravity: Starts 2026 Higher After Monumental Gains Not Seen Since Post-Crisis 2009

7 months ago

Save

Mexican Peso Surpasses 20 per Dollar as U.S. Election Nears

2 yrs ago

Save