Chile industry data soft, reaffirms rate pause view
Chile's industrial production rose 2.5 percent in November from a year ago, below market expectations in a sign of economic moderation that could prompt the central bank to hold its key rate steady in January.
Industrial output rose a seasonally adjusted 0.3 percent in November compared with October, the government said on Wednesday.
A Reuters poll showed the market expected year-on-year growth of 2.7 percent in November while the country's top trade association saw seasonally adjusted growth of 2.3 percent.
A slowdown in the economy of the world's top copper producer and stable prices could lead the central bank to hold its benchmark rate at 3.25 percent at its next meeting in January 13, some analysts said.
Matias Madrid, chief economist for Banco Penta, said economic activity is setting up a scenario of high probability for a pause in the normalization of monetary policy in January.
Inflation data coming out on January 7 will be crucial for that decision, he added.
A Reuters poll on Wednesday showed the economy of the world's top copper producer grew 5.4 percent in November from the same month a year ago. The median forecast of 19 traders and analysts shows a slowdown in growth after activity spikes of 7.5 percent in May and 7.4 percent in August.
Chile has seen its economy surge this year on the heavy spending to rebuild cities ravaged by a February 27 quake and record prices for its main export, copper. The central bank expects Chile's economy to grow 5.2 percent this year after contracting 1.5 percent in 2009.
MINING, CONSTRUCTION DIP
The National Statistics Institute said domestic consumption grew strongly in November, boosting industries with the exception of mining and construction.
Cellulose and glass production capacity remain below pre-quake levels, the institute said.
In general terms a dichotomy is observed again between offer and consumption indicators, Bice Inversiones said in a report to clients. This is consistent with our view of a slowdown in economic activity in the last quarter of the year.
The brokerage of the financial group Bice said it predicted the economy grew 5 percent in November.
The country's copper output dipped 0.3 percent in November from a year earlier to 467,478 tones, the national statistics institute said.
A month-long strike at the world's No. 3 copper mine, Collahuasi, dragged Chile's mining production down slightly in November. It added that production has experienced a downward trend since July.
Industrial production rose a weaker-than-expected 1.7 percent in October from a year earlier, and fell a seasonally adjusted 0.4 percent that same month.
(Reporting by Antonio de la Jara and Alonso Soto, Editing by Chizu Nomiyama and Dan Grebler)
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