Chilean Economy Unexpectedly Grew in December from Year Earlier

(Bloomberg) -- Terms of Trade is a daily newsletter that untangles a world embroiled in trade wars. Sign up here. Chilean economic activity expanded year-on-year in December for the first time in the last quarter of 2019 despite a wave of anti-government protests that shuttered stores and spooked investors.Powered by 3.7% growth in mining, the central bank’s economic activity index expanded 1.1% from a year earlier, compared with the median estimate for a 0.5% contraction according to analysts surveyed by Bloomberg. Year-on-year growth had been negative in both October and November.President Sebastian Pinera’s administration is grappling with months of protests over inequality and prospects of greater uncertainty going forward. In April, voters will decide whether the nation’s constitution should be re-written. That means there may be a strong hit to the economy in the second quarter of this year, according to Bank of America Merrill Lynch.The government was expecting a 1% drop in activity last month. It has pledged billions of dollars in fiscal stimulus to help the economy, while Congress recently approved a tax reform to increase welfare spending.Excluding mining, activity rose 0.8% from a year ago, according to the data published on Monday. Non-mining growth rose 2.7% month-on-month.The central bank last week held its benchmark interest rate unchanged amid uncertainty from the protests. Meanwhile, the activity figures following December unemployment and industrial production data that beat analysts’ estimates.Read More: Chilean Industrial Output Beats Expectations, Joblessness RisesTo contact the reporter on this story: Valentina Fuentes in Santiago at vfuentes8@bloomberg.netTo contact the editors responsible for this story: Eduardo Thomson at ethomson1@bloomberg.net, Matthew Malinowski, Sebastian BoydFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

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