(New throughout, adds comments from finance minister, statistics, inverstors’ note, background)
By Gram Slattery and Anthony Esposito
SANTIAGO, May 5 (Reuters) - Chile’s economic activity rose 2.1 percent in March from the same month a year ago, due to growth in the services sector, the central bank said on Thursday.
The IMACEC economic activity index, encompassing about 90 percent of the economy tallied in gross domestic product figures, came in slightly above a Reuters forecasts for a 2.0 percent rise.
Chile Finance Minister Rodrigo Valdes said the sluggish economy appeared to be on an upward swing.
“I always say you need to be careful looking at one specific statistic given its volatility,” Valdes told reporters at a press conference following the release of the data.
“But the information keeps indicating that the low point of the cycle already occurred a while ago.”
However, subdued business confidence, tight credit, and rising unemployment are likely to weigh on the top copper exporter in the coming months, analysts said.
“We expect the economy to lose momentum in coming quarters, undermined by less stimulative monetary and fiscal policies, subdued consumer and business confidence, soft external demand, and a deteriorating labor market,” Goldman Sachs wrote in a note to clients.
In comparison with February, economic activity decreased a seasonally adjusted 0.1 pct. Growth in the first quarter versus a year earlier was 1.8 percent, and 1.2 percent versus the previous quarter, stripping out seasonal factors.
Chile’s central bank had said in March that the economy will grow between 1.25 and 2.25 percent in 2016, as continued weakness in mining investment due to cooling demand in China and falling copper prices hold back a more dramatic rebound. (Reporting by Gram Slattery and Anthony Esposito; Editing by Chizu Nomiyama and David Gregorio)