Chile’s economy saw a 0.4% growth in Q4 2024, slightly below expectations, but an annual growth of 4.0% exceeded forecasts. For the entire year, GDP grew 2.6%, with strong performance in exports and domestic demand despite inflation concerns. The government forecasts a GDP growth of 2.5% for this year, with inflation above target levels.
Chile’s economy exhibited a slowdown in the fourth quarter of 2024, with a 0.4% increase compared to the prior quarter, slightly lower than economists’ expectations of 0.5%. Despite a decline in mining activity, growth was supported by gains in services and agriculture. On an annual basis, the economy expanded 4.0% in Q4, surpassing the anticipated 3.7%.
Throughout 2024, Chile’s economy grew by 2.6%, driven primarily by exports and internal demand, which rose by 1.3%. This annual growth exceeded the central bank’s December projection of 2.3% and represents a significant improvement from the previous year’s mere 0.5%. It is the strongest growth observed since the recovery following the pandemic in 2021.
Experts note that domestic demand has displayed resilience, indicating potential for further growth due to robust private consumption. However, risks remain from volatile external factors and stringent financial conditions, limiting policymakers’ flexibility. The Chilean government projects GDP growth at 2.5% for the current year, with inflation expectations set at 4.7%, above the official target of 2% to 4%.
In summary, Chile’s fourth-quarter economic performance reflects a slowdown while still exceeding growth estimates for the year. The overall expansion in 2024 highlights resilience in domestic demand and exports. However, challenges, including inflation and external economic volatility, may impact future growth. Policymakers remain cautious as they approach crucial interest rate decisions.
Original Source: money.usnews.com
