UPDATE 1-Chile factory output ends weak year on worse note

viernes 29 de enero de 2016 09:52 GYT

(Recasts, adds further output figures, retail sales data, context)

SANTIAGO Jan 29 (Reuters) - Chilean factory output capped a weak year with a far poorer-than-expected performance in December, highlighting struggles by the top copper exporter to get growth going again.

Manufacturing production fell 2.8 percent in December from a year earlier, government data showed on Friday, considerably underperforming a Reuters poll forecast for a 1.7 percent drop. It was flat compared to November.

For all of 2015, output declined 0.6 percent compared with a year ago, the INE statistics agency said. It emphasized that falling production of metal products and equipment parts in particular contributing to the drop.

Chile is particularly vulnerable to weakening growth in top metals consumer China. Throughout the year, data has regularly undershot hopes for a revival, with a rapidly depreciating peso also stoking inflation.

"In an event of a China hard landing, Chile would be one of the most severely hit emerging markets, despite its credentials as a well-managed economy," Oxford Economics said in a note to clients.

"Given its high exposure to the Chinese economy and its reliance on copper exports, the country would experience a two-year recession for the first time since the 1980s," it added.

The economy is often seen as one of the best managed in Latin America and is expected to grow around 2.1 percent in both 2015 and 2016, according to the International Monetary Fund's latest projections.

One bright spot has been unemployment, which has remained low by historic standards despite market and central bank warnings of a likely rise. In the three months to December it fell to 5.8 percent, well below forecasts.   Continuación...