Chile’s economy grew at its slowest pace in several years in the third quarter, as investments and domestic demand continued to decline.
The country’s central bank said on Tuesday that gross domestic product expanded 0.8% in the quarter compared with same period a year earlier, bringing accumulated growth in the first nine months to 1.8%, Reuters reported.
Chile’s economic growth has weakened sharply from last year, when it expanded by 4.1%. Investments in Chile’s important copper mining industry have eased, especially for machinery and equipment.
The central bank said that fixed investments fell 9.9% in the third quarter, while domestic demand weakened 1.9%.
”Annual GDP growth in Chile dropped to a five-year low in the third quarter, but on a quarterly basis growth edged up a little. We expect a further, albeit gradual, recovery over the coming quarters,” Capital Economics said in a research note.
In seasonally adjusted terms, the economy expanded 0.4% in the third quarter from the previous quarter.
The central bank has tried to stimulate economic growth by cutting its monetary policy rate by 200 basis points in a little more than a year, to 3.0%. Many economists expect the central bank to continue to ease monetary policy.
In the third quarter, a majority of sectors showed a weak performance, especially manufacturing, and agriculture, the central bank said. Mining sector activity contracted 0.5% in the quarter, it added.
Fishing, and the electricity, gas and water sectors, showed some strength in the quarter, it said. The bank said this week that the forecast for growth in 2014 is 1.8%.
Separately the central bank said that Chile posted a current-account deficit of $1.68 billion in the third quarter, or 2.7% of GDP.
