Greater mobility of people, partial withdrawals of pension savings and fiscal transfers continued to stimulate household consumption, registering higher spending on services and non-durable goods ”.
Central Bank of Chile
The thrust of economic activity in Chile continues with double-digit increases. According to the National Accounts report of the Central Bank, in the third quarter the economy grew 17.2% compared to the same period of the previous year.
This marks its second consecutive double-digit period after the unprecedented 18.1% of the second quarter. Thus in the year, the Gross Domestic Product (GDP) already registered an expansion of 11.6% in twelve months.
According to the report, the performance of the third quarter of the year was a reflection of the combination that occurred between: greater openness of the economy, economic measures to support households and companies, and partial withdrawals of pension funds. All this, in addition, subjected to a low base of comparison that was the balance left by the first year of the pandemic.
By sector, the driving force was services (19.1%) that benefited from fewer measures to restrict mobility as the economy reopened amid the decrease in infections from covid-19. In them, both those exercised by individuals and companies had a strong annual recovery of 24.5% and 20.7%, respectively.
In line with the above, compared to the second quarter and with seasonal adjustment, economic activity showed an acceleration of 4.9 percent.
The report indicates that here it was also the reactivation of service activities, mainly personal and business, that led the growth. They were joined by the dynamism of commerce.
All this driven by household consumption, which increased 27.5% in twelve months. This is what keeps domestic demand strong during this period as well as what happened in the second quarter of this year.
As a correlate of this pressure exerted by consumption – which in the third quarter focused on spending on goods, services and non-durable goods – net exports had a negative influence on the performance of GDP. The reason? Higher imports versus limited export growth, explains the report.
On the investment side, measured in the Gross Formation of Fixed Capital (GFC), between July and September it grew 29.8 percent.
The real gross national disposable income (INBDR) grew 16.9%, an increase less than that observed in GDP, explained by higher incomes and transfers paid abroad, the Central Bank report indicates. “This effect was partially offset by an increase in the terms of trade,” he adds.
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