Chile’s economic activity barely nudged upward in June 2024, with a marginal 0.1% year-over-year increase, according to the latest Imacec economic activity index data released by the Central Bank of Chile.
This growth rate is a sharp slowdown from the 1.1% rise recorded in May and falls significantly short of market forecasts, which had predicted a 1.7% increase.
The mixed sectoral performance highlights the underlying complexities within Chile’s economy.
Mining has been a notable bright spot, with a robust 5.9% increase largely driven by a surge in lithium extraction.
This sector’s growth reflects the ongoing global demand for lithium, which is critical for battery production and renewable energy technologies.
In contrast, the services sector experienced a notable contraction, with a 1.8% decline.
This drop underscores the ongoing challenges faced by this sector, which has struggled with issues that have dampened overall economic performance.
The trade sector, however, showed resilience with a commendable 4.3% increase, contributing positively to the overall economic landscape.
Performance in June was also impacted by specific sectors
When adjusted for seasonal variations, Chile’s economic activity actually grew by 0.3% in June, rebounding from a 0.4% decrease in May.
This small recovery highlights the inherent volatility within the Chilean economy and emphasizes the importance of seasonal adjustments in accurately assessing economic trends.
A deeper dive into regional performance reveals significant disparities across the country. Some regions have experienced robust growth driven by specialized industries, while others have faced economic challenges that have hindered their performance.
Understanding these regional differences is crucial for evaluating Chile’s economic health and for developing targeted strategies to promote inclusive growth.
The economic performance in June was also impacted by specific components of the economy.
Auto and motor vehicle sales played a significant role, with the auto sector experiencing lower sales.
In contrast, sales of construction machinery, equipment, and materials showed a more positive trend.
The unadjusted figures for June showed a 0.4% decrease from the previous month, largely attributed to reduced car sales and minor trade activities.
On an annual basis, services saw a modest 0.8% increase, driven primarily by personal services and transportation.
However, business services faced a decline, contributing to a 0.2% decrease in seasonally adjusted figures compared to the previous month.
The overall picture from June reflects a mixed economic environment in Chile, with significant sectoral and regional variations.
While some areas, particularly mining and trade, showed positive growth, others, including services and auto sales, faced challenges.
As Chile navigates these economic fluctuations, a nuanced understanding of sectoral and regional dynamics will be essential for fostering balanced and sustainable growth.
The post Chile’s economic growth stalls: Just 0.1% increase in June falls short of expectations appeared first on Invezz
