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UPDATE: Chile Sep Imacec -1.1% On Year; Consensus Was -0.5%

(Adds comments from Finance Minister and other information, in the sixth through ninth paragraphs.)

 
   By Carolina Pica 
   Of DOW JONES NEWSWIRES 
 

SANTIAGO (Dow Jones)--Chile's monthly economic-activity index, or Imacec, contracted 1.1% in September, following a 0.1% decrease the previous month, the central bank said Thursday.

Analysts expected a 0.5% drop, according to the median estimate in a Dow Jones Newswires survey of 14 economists. Estimates for the survey ranged from a decrease of 1% to a rise of 0.5%.

"Lower industrial output, which was partially offset by an increase in mining production and retail activity, had an impact in the monthly result," the central bank said in a brief statement.

The monetary authority noted that September 2009 had one more business day than the same month last year.

The seasonally adjusted Imacec fell 0.3% from the previous month, while the cyclically adjusted series rose 1.8% on the year, the central bank said.

Economic activity "was lower than what the market expected, but we've always known that some months generate noise," Finance Minister Andres Velasco told reporters. He noted that, while industrial output fell, some sectors were recovering.

Industrial production in September fell 5.2% on the year, copper production jumped 8.5% on the year, mostly due to increased production at larger copper mines such as BHP Billiton Ltd.'s (BHP) Escondida, which is ramping up production following an accident at one of its ore-crushing mills last year. Chile produces about a third of the world's copper.

Retail sales for the month increased 1.6% on the year while supermarket sales gained 5.2%. After climbing to a cyclical peak of 10.8% for the three-month period of May-July, unemployment fell to 10.2% in the July-September period.

"When sales continue [to be] dynamic, it's because [people] have money in their pockets and we hope domestic demand, which has been an important motor boosting the economy, will continue to show vigor," the minister said.

The Imacec is considered a proxy for the country's gross domestic product because it encompasses 90% of the GDP's components.

The bank also said it will publish third-quarter GDP figures and revised first- and second-quarter data on Nov. 18. Based on the Imacec index data, third-quarter GDP will likely show a contraction of about 1.3% on the year.

For 2009, the central bank expects GDP to contract between 1.5% and 2% on the year. For 2010, the bank has a more optimistic outlook, as it expects GDP to grow 4.5% to 5.5% from 2009.

-By Carolina Pica, Dow Jones Newswires; 56-2-820-4244; carolina.pica@dowjones.com

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(END) Dow Jones Newswires

November 05, 2009 11:32 ET (16:32 GMT)


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