Chile's economy grew 4.6 percent in January, accelerating from December as it got a boost from mining activity as well as the nation's retail and financial services sectors. The result was in line with the expectations of a Reuters poll of six economists, who had a median forecast of 4.6 percent growth for Chile's IMACEC for the month.
The IMACEC, a monthly gauge, measures more than 90 percent of the components comprising Chile's gross domestic product. GDP figures are issued quarterly. "The IMACEC was no great surprise," said Tomas Flores, an economist with the Instituto Libertad y Desarrollo think tank in Santiago. "This growth should be similar to what we expect for the first quarter."
Analysts said the figure for January, higher than the 3.6 percent economic growth in December, and tame inflation figures for February were likely not enough for the central bank to change monetary policy at its monthly meeting on March 15.
"In our view the central bank will need to see more data points on activity and inflation to determine whether additional monetary stimulus is needed or whether the current stance of monetary policy is appropriate to keep inflation around the 3.0 percent midpoint of the inflation target band," said Alberto Ramos of Goldman Sachs in New York.
The central bank took the market by surprise in January with a 25-basis-point cut of the benchmark rate, to 5.0 percent. Chile's National Statistics Institute said on Monday that consumer prices fell 0.2 percent in February, in line with expectations and helped by lower transport costs.
The median forecast of six economists polled by Reuters was for a 0.15 percent fall in consumer prices. Prices increased 0.3 percent in January and fell 0.1 percent in February 2006.
Prices fell following the launch of a new public transport system in the capital. "Transantiago," as the system is called, overhauled Santiago's mass transit by reorganising bus routes to integrate them with the modern light rail and subway system and by instituting electronic swipe-card payments that eliminated bus transfer charges. The INE said that in the 12 months to February core inflation, which excludes fuel and fresh fruits and vegetables, was 3.1 percent.