MercoPress. South Atlantic News Agency

Mining and construction boom fuelled Chilean economy in 2012, growing 5.6%

Good prices for cooper and massive investments in mining were decisive

Chile’s GDP expanded 5.6% in 2012 as a boom in the mining and real estate industries demand boosted investment and sparked an increase in consumer spending. The economy grew 5.7% in the fourth quarter from 2011, the central bank said in a report on its website.

Copper prices exceeded central bank forecasts in 2012, fuelling an increase in mining investment as companies such as BHP Billiton and state-owned Codelco built new production capacity. The mining boom has fuelled near full employment and stimulated consumer spending.

In 2010 the Chilean economy grew 5.2% and in 2011, 6%, while in 2012 the quarters were: 5.1%; 5.7%; 5.8% and 5.7%. According to the central bank last year all economic activities performed positively with the sole exception of agriculture and forestry which declined 0.6%.

The best performing sectors were services, 6.6%; retail, 8.4%; personal services, 5.9%; mining, 4.3% and construction, 8.1%. Domestic demand on the other hand surged 7.1%. Private spending grew 7.3% in the fourth quarter, while investment increased 18%, according to the report.

Goods and services exports expanded 1% while imports 4.9%. National gross real income jumped 4.6%. Overall national savings climbed to 25% of which 21.5% was domestic and 3.5% foreign savings.

Copper prices, the country’s main export, averaged 3.64 US dollars a pound, exceeding the central bank forecast by 0.03. The current account deficit expanded to 9.5 billion from 3.3 billion in 2011.

Chile’s GDP is expected to expand 4.75% this year, surpassing the average for Latin American nations by more than one percentage point. The economy as measured by the Imacec index, which is a proxy for GDP, increased 6.5% in the first month of the year.

The Chilean Peso, which has gained 2.1% against the US dollar in the past 12 months, fell 0.2% to 472.48 per dollar so far this year.