Chile: Growth was rapid in January

Daily Latam Spotlight - 6 March 2013

Chile: Growth was rapid in January

The monthly proxy for real GDP, Imacec, expanded 6.7% y/y in January. This is in line with our 6.8% y/y forecast and slightly above the median estimate from the Bloomberg survey of 6.5% y/y. Growth was rapid across the board. Mining activity expanded 8.4% y/y, manufacturing advanced 4.4% y/y and services rose 6.9% y/y. The three-month moving average of GDP growth was 5.6% y/y in January, the same as in the month before. In monthly terms, real output rose 0.1% m/m in January, and was 17.0%, saar above Q4.

President Sebastian Pinera's popularity rose to 38% in February, a near two-year high. High growth and declining unemployment rates as well as territorial conflicts with Peru and Bolivia are underpinning a rebound in Pinera’s popularity from a record low of 26% in April amidst student protests that demanded education and tax reforms. It is unlikely that President Pinera’s increased popularity will translate into support for the right-wing bloc's candidate in the November presidential election. Indeed, nearly half the population (49%) supports the return of the popular former President Michelle Bachelet to the office.