|
Third
Quarter growth in line with expectations. Despite weaker
economic activity in September, the economy showed a healthy expansion in
the third quarter this year. According to the Central Bank, Gross
Domestic Production (GDP) expanded by 5.8% compared to the third quarter
last year. The third quarter figure was somewhat below the
pre-announced 6.0%, owing to downward revisions in the preliminary growth
estimates for July and August, but precisely in line with the Consensus.
Even though third quarter growth was well below the expansion rate
registered in the second quarter (+6.1% year-over-year), seasonally
adjusted data indicate that economic growth actually accelerated over the
first half of this year (+1.7% in Q3 over Q2).
Domestic
demand growth drops significantly. Growth of domestic
demand slowed significantly to 6.3% year-over-year compared to 12.0%
registered in the second quarter. The slowdown was prompted by much
lower consumption owing to a higher comparison base in 1999.
Investment, on the other hand, improved markedly and registered growth for
the first time since end 1998, expanding 7.7% over the same quarter last
year.
Fishing
and electricity lead growth. On a sectoral basis, growth
was led by fishing, which added 23.8% over Q3 1999, pushed by strong
external demand for Chile’s fish farm products, but also favoured by a
slump in the same quarter last year. Agriculture expanded by 8.7%
annually. Electricity, gas and water also exhibited strong growth
(+20.7% year-over-year) as the mostly hydroelectric power plants
benefitted from abundant water supply, compared to last year when draught
induced substantial shortages. This effect, however, which has
provided the basis for abundant growth rates in electricity output in
2000, should wane in the fourth quarter and growth rates should come down
to levels in line with electricity demand growth. Growth of
industrial manufacturing slowed to 3.0% from 8.1% and 5.9% registered in
the first and second quarter respectively. The slower growth in
manufacturing activity can be attributed to lesser dynamism of products
manufactured for the domestic market (+1.7% yoy). Growth in products
fabricated for exports, on the other hand, proved more buoyant (+7.8% yoy),
propelled by strong demand for processed seafood and fruits.
Commerce, restaurant and hotel activities picked up the pace, increasing
by 5.6% over Q3 1999, as supermarket, automobile as well as durable and
capital goods sales improved markedly. Transport and communications
remained the most dynamic services sub-sector, adding 11.6% over the third
quarter last year, but grew at a lesser pace than the 11.9% registered in
the second quarter. While communications and freight transport
remained dynamic, passenger flight traffic only showed a moderate
development.
Industrial
production strong and unemployment drops. Meanwhile, more
recent data provide a first gauge of fourth quarter performance. In
October, industrial production increased by 5.2%, significantly up from
the 0.7% contraction in September and also above market expectations.
As investment recovers, capital goods production, which had been
contracting since February this year, is on the rebound, adding 6.3% over
October last year. The recovery is corroborated by healthy capital
goods imports and capital goods sales. Capital goods sales showed
positive growth for the third consecutive month and added 33.6% over the
same month last year. Only growth in durable consumer goods
production continued to slow and remained far behind the strong expansion
experienced earlier in the year.
|
