Chile's economic activity grew in July after three months of contraction.
Monthly growth of 1% was driven by mining and occurs amidst electoral disputes in the country.
247 - The Chilean economy recorded its first monthly growth since April in July, with performance driven mainly by the mining sector. The data was released by the Central Bank of Chile and comes at a time when economic policy is gaining weight in the electoral debate, on the eve of the presidential election scheduled for November.
According to the monetary authority, the Imacec index — which serves as a preview of GDP — rose 1% compared to June. Year-on-year, the expansion was 1,8%, slightly below the median of 1,9% projected by analysts consulted by Bloomberg itself.
Boost from mining and domestic consumption
The breakdown shows that mining advanced 5,2% in the month, while commerce grew 1,4% and services 0,7%. Industry, however, showed a decline of 0,5%. President Gabriel Boric's administration is considering revising upwards the official growth estimate for 2025, currently projected at 2,5%. In the first quarter, Chilean GDP grew 2,5%, and in the second, 3,1%.
Analysts highlight that salary adjustments have boosted household consumption and that investor confidence is beginning to recover, with expectations that the elections will result in a more market-friendly government. However, the labor market remains fragile and mineral production continues to be volatile, adding uncertainty to the scenario.
Monetary policy in transition
At the end of July, the Central Bank reduced the benchmark interest rate by 0,25 percentage points to 4,75%, the first drop of the year. The board signaled that the cycle of cuts should continue in the coming quarters, seeking to further stimulate economic activity.
Elections on the horizon
Chile is preparing for the first round of its presidential election on November 16. If no candidate achieves a majority, a second round is scheduled for December 14. Economic performance will be a central theme of the contest in a country marked by strong fluctuations in the mining sector and the search for stability after years of social and political tensions.
