Chile's Economic Activity Misses Forecasts in May Despite Mining Boost

Chile's economic activity rose 3.2% in May when compared to a year earlier, driven by a strong performance of its key mining sector, but still landed below market forecasts, central bank (BCCh: Banco Central de Chile) data showed on Tuesday, July 1, 2025.
The IMACEC index¹, which accounts for about 90% of the Andean country's gross domestic product, accelerated from the 2.5% year-on-year increase reported in April but missed the 3.7% expansion forecast by economists polled by Reuters.
The mining sector of the world's largest copper producer posted the main activity jump as it grew 10.3% year-on-year, boosted by higher output of the red metal, the bank said. "The (annual) IMACEC result was explained by the growth of all its components, with the performances of services and mining being the highlights," it added in a statement.
On a monthly basis, economic activity in the Andean country was down 0.2%, the bank said. "Economic activity remains solid, despite the modest month-to-month decline in May, which followed a decent run," Pantheon Macroeconomics' chief Latin America economist, Andres Abadia, said. "The outlook remains positive."
After recording a 2.6% growth for 2024, Fitch Solutions forecasts growth to come in at 2.4% this year and 2.3% in 2026. This forecast is underpinned by the expected continued recovery of private consumption, with consumer confidence and retail sales looking strong and robust mining exports.
Notably, Fitch’s mining production outlook remains solid for this year, and the state mining company Cadelco is partnering with the private sector on new lithium projects. However, elevated inflation poses some headwinds in 2025, as neither Fitch nor the BCCh expects inflation to fall to the 4.0% upper tolerance range by year-end, but inflation should moderate by year-end.

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¹Spanish acronym for Monthly Index of Economic Activity

(Sources: Reuters and Fitch Connect)