Chile’s Economic Surge: December 2024 Marks Impressive Growth

Chile’s economy ended 2024 on a high note, with the Monthly Index of Economic Activity (Imacec) rising by 6.6% in December compared to the previous year.

This growth, reported by the Central Bank of Chile, surpassed expectations and marked a significant economic rebound. The increase was partly due to December having two more working days than the same month in 2023.

Goods production led the charge, with a 13.3% annual increase. This growth was driven by robust fruit production, particularly cherries, and strong mining activity. Copper and lithium extraction played a crucial role in boosting the mining sector.

Manufacturing also contributed, with increased production of foodstuffs and fuel. Seasonally adjusted, goods production rose by 2.3% from November, thanks to mining.

Trade activity also showed strong performance, rising by 10.6% annually. Wholesale trade was a key driver, fueled by food sales and fruit exports. Retail trade, including department stores and online sales platforms, also performed well.

The automotive trade saw higher vehicle sales, contributing to the overall growth. Deseasonalized figures showed a 2.7% increase from the previous month, influenced by wholesale and automotive activity.

Chile’s Economic Recovery

The services sector grew by 2.0% annually, driven by transportation services related to foreign trade. Entrepreneurial services also contributed to this growth. Seasonally adjusted figures for services remained unchanged from November.

The non-mining Imacec posted annual growth of 5.4%, with a 0.4% increase in deseasonalized terms from the previous month. The Central Bank of Chile will release the GDP estimate for 2024 on March 18, 2025.

This report will include revisions for the first three quarters. The economic recovery in Chile is supported by lower interest rates, strong commodity exports, and a recovering labor market.

This growth is expected to continue into 2025, with private consumption benefiting from slowing inflation and improved labor market conditions. Chile’s economic recovery is also supported by a more stable political outlook and favorable external conditions.

Better growth prospects for trading partners and improved international financial conditions contribute to this positive outlook. However, challenges remain, including concerns about crime, migration, and inequality, as well as political polarization that could hinder reform progress.

Overall, Chile’s economic activity has shown significant improvement. The country’s diverse sectors, from mining to trade and services, have contributed to this growth.

As Chile continues to navigate economic challenges, the robust performance in December 2024 provides a strong foundation for future growth. The upcoming GDP estimate will provide further insights into the country’s economic trajectory.