(Recasts, adds interest rate expectations, domestic demand, analyst comment, graphic)
By Anthony Esposito and Rosalba O‘Brien
SANTIAGO, Nov 18 (Reuters) - Chile’s economy quickened its pace of growth slightly in the third quarter versus the prior three months, central bank figures showed on Tuesday, but economists said overall it remains “moribund” with little sign of an imminent rebound.
The economy has been slowing over the last year, hampered initially by a fall in mining activity and further by cooling consumption, although the central bank has previously forecast that the third quarter should be the low point.
Gross domestic product grew 0.4 percent quarter-on-quarter on a seasonally-adjusted basis, with higher exports contributing to an improvement on the second quarter’s 0.1 percent fall from the first quarter.
However, compared with the same quarter a year ago, third-quarter growth rose 0.8 percent, the weakest performance since the third quarter of 2009, when the economy was in recession.
The year-on-year figure came in slightly below Reuters estimates for a 0.9 percent rise, with the central bank citing weak performance across most sectors, with only fishing and utilities showing dynamism.
Domestic demand slid 1.9 percent year on year.
“The Chilean economy remains moribund,” said Goldman Sachs economist Tiago Severo. “At this juncture we do not identify clear signs suggesting an immediate rebound in the real business cycle momentum.”
Certain factors should support incipient improvement in coming quarters, however, said Edward Glossop, emerging markets economist at London-based Capital Economics.
“A $500-million public investment program began in Q4, and the lagged effects of previous rate cuts should start to ease some of the pressure on consumers,” he said.
To counteract the slowdown, the central bank cut its benchmark interest rate by 200 basis points over the last year.
However, the market expects the rate will almost certainly be kept steady when the bank holds its monthly monetary policy meeting later on Tuesday.
Despite the stagnant economic growth, inflation has surged to 5.7 percent, far above the bank’s 2 to 4 percent target range, and the bank has indicated that it will pause its easing cycle for now.
Editing by W Simon and Meredith Mazzilli