After mixed GDP data from Chile, fears of recession rise

May 18 (Reuters) – Chile’s economy grew rapidly in the first quarter of 2022 from a year earlier but contracted sharply quarter on quarter, central bank data showed on Wednesday, raising concerns that the country is heading into a recession.

Gross domestic product (GDP) rose 7.2% from January to March from a year ago, fueled by an expansion in the service and retail sectors, and below expectations for an increase by 7.9%.

“Much of the business recorded positive numbers, with the strongest increases in service activities – in particular, personal, transport and business – and in retail trade,” the central bank said.

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Mining, agricultural, forestry and fishing activities have all declined, the bank added.

However, in seasonally adjusted terms, GDP contracted 0.8% in the first quarter from the previous three months, the data showed. This compares to an expected decline of 0.4%.

“Chile’s first-quarter GDP contraction of 0.8% q/q suggests the economy is coming back to earth after a strong 2021, and there is a growing risk of a recession this year,” Nikhil said. Sanghani, emerging markets economist at Capital Economics. .

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Reporting by Gabriel Araujo and Steven Grattan in Sao Paulo, writing by Anthony Esposito; Editing by Louise Heavens, John Stonestreet and Nick Zieminski

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