Chile's industry output fell in July from June and slowed sharply from a year ago as copper output sank, data showed on Tuesday, underlining an economic slowdown, but the central bank is seen holding its key rate for now. Industrial output fell a seasonally adjusted 0.4 percent in July compared with June, government statistics agency INE said. Output rose a much lower-than-expected 0.7 percent from a year earlier.
Analysts polled by Reuters had forecast a median rise of 4.0 percent for July from a year ago, though they see industrial output slowing in the second half of the year on Chile's moderating economic growth, high interest rates and a darkening global financial outlook. The INE said economic volatility in the United States and Europe had hit growth expectations and the external outlook for local industry. "This month, a lower rhythm of activity has been recorded in a few manufacturing branches," the agency said in a statement. "Manufacturing was less dynamic."
It said extreme weather conditions and a strike had pummeled copper output, which also fell in June on heavy rains and labour action. "Today's fall has to do with periods of stoppages and strikes that happened in the sector, and we expect them to recover," Finance Minister Felipe Larrain said of the July copper output data. Copper prices rallied to their highest in almost a month on Tuesday.
Larrain said the economy was "undoubtedly entering a slowdown period", and that the government was closely watching a complex external scenario. Both stocks and the peso were unfazed by the data. Copper output in the world's No 1 producer totalled 373,498 tonnes in July, down 18 percent from the same month last year, the INE said.
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