Chilean economy grows 7% in its biggest rise since 2005

Figures released by Chile’s Central Bank for the third quarter of 2010 show Chile’s economy continuing its upwards march, hitting a five-year high in quarterly year-on-year growth.

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The Chilean economy registered 7 percent growth in quarter three this year, July to September, versus same period in 2009. This marks its largest expansion since a 7.2 percent high in quarter three of 2004, and equals 7 percent growth seen in quarter two of 2005.

Following on from this year’s growth of 1.6 percent in quarter one and 6.6 percent in quarter two, the country’s economy continues its striking climb in spite of the worldwide recession and the devastating 8.8 magnitude earthquake that hit the central Chilean coast on Feb. 27 this year.

According to the report released by Chile’s Central Bank, all sectors except Fishing and Real Estate saw growth, with the largest increases in the Electricity, Gas and Water (EGA), Trade, Transport and Communications sectors.

In the EGA sector expansion reached 19.6 percent, following 24.9 percent growth in quarter two. Gas had the greatest impact of the three due to activity in the country’s two plants in Quintero, 130km northwest of Santiago, and Mejillones, 60km from northern city of Antofagasta.

The report said that the greatest overall impact, however, came from the Trade sector, both for its own 15.1 percent growth and also for its impact on other sectors such as Financial Services, Business and Transport.

Overall, domestic demand increased 18.2 percent, led by consumer spending and, to a lesser extent, investments.

The Central Bank has predicted an increase in Gross Domestic Product (GDP) of between 5 and 5.5 percent for 2010, while for 2011 it predicts an increase of 5.5 to 6.5 percent.

This post is also available in Spanish