Economic Analysis - Outlook Still Constructive, Despite Weak First Quarter - AUG 2017


BMI View : W eak economic performance in the first quarter has not changed our fundamentally positive outlook on the Chilean economy. We expect copper production, private consumption and investment will all increase in the months ahead, spurring a modest acceleration in growth.

Despite Chile's disappointing economic performance in Q117, we maintain our view that the economy will rebound from several years of declining growth over the next two years. The economy's weakness in the first quarter was largely driven by one-off factors, which has masked positive trends in private consumption, business and consumer confidence and political risk. While we have revised down our real GDP forecast for 2017 to 1.7% - from 2.0% previously - due to the economy's first quarter performance, we remain fundamentally constructive on Chile's economic prospects.

Mining Strike, Falling Investment Undermined Q117 Growth

Escondida Strike, Weaker Investment Weighing Down Growth
Chile - Real GDP By Expenditure, chg q-o-q, USDmn
Source: BCC, BMI

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