Chile’s Growth Beats Expectations as Stimulus Powers Demand

(Bloomberg) -- Chile's economic boom is proving more resilient than many had forecast, with activity expanding faster than expected in November for the eighth time in the past nine months.

The Imacec index, a proxy for gross domestic product, rose 14.3% in November from the year earlier, above the 12.9% median estimate of analysts surveyed by Bloomberg. For the month, activity expanded 0.3%, the central bank reported Monday.

The economy grew as much as 12% in 2021, according to central bank forecasts published last month, marking the fastest pace on record. Growth was driven by fiscal stimulus during the pandemic and about $49 billion in early pension withdrawals, which triggered a consumer spending boom.

Economic activity was driven by services, which expanded 20% from a year prior and 1.8% versus the previous month. On the other hand, mining slipped by 0.3% from a year earlier and 0.9% versus October.

On Friday, the statistics institute reported that November manufacturing output and retail sales grew 5% and 16.7%, respectively, from a year ago. Manufacturing was in line with economists' estimates while retail sales were lower than expected.

The central bank hiked its key rate by 125 basis points to 4% at its last meeting in mid-December. Policy makers forecast consumer prices rose 6.9% last year and that they will rise 3.7% in 2022.

Daily Covid-19 cases rose in November, before decreasing again in December. More than half of the nation already has a booster shot, a rate that is among the highest in the world. Chile came out in first place in Bloomberg's Covid Resilience Ranking last month.