GDP contracts modestly as short-term growth momentum weakens
Recent dynamics
Chile experienced relatively strong but volatile sequential growth during 2024. Real GDP expanded 1.34% in the first quarter, contracted 0.71% in the second, and then rebounded with growth of 1.64% and 0.94% in the final two quarters.
Growth remained positive at the beginning of 2025, reaching 1.05%, but momentum subsequently weakened. Quarterly growth slowed to 0.29%, turned negative at −0.33%, and then recovered modestly to 0.52%.
The latest observation reversed that improvement, with seasonally adjusted real GDP declining approximately 0.26%. The sequence therefore continues to show alternating expansion and contraction rather than a sustained acceleration in economic activity.
The weakness was not uniform across the economy. Domestic demand remained comparatively resilient, while mining, primary activities, and external trade contributed more heavily to the deterioration in aggregate output.
Interpretation and economic signal
The latest result represents a clear loss of short-term momentum. Quarterly growth moved from +0.52% to approximately −0.26%, indicating that the preceding recovery was not sustained.
The magnitude of the contraction remains modest, however. A single slightly negative quarter does not by itself establish a recessionary trend, particularly when part of the weakness reflects volatile mining and other sector-specific factors.
The resilience of household consumption and investment provides an important qualification to the headline decline. Internal demand conditions have remained firmer than aggregate GDP alone might suggest.
Nevertheless, the broader quarterly pattern remains weak. Growth has repeatedly alternated between modest expansion and contraction, indicating that Chile has yet to establish a sustained period of stronger real economic momentum.
A more convincing improvement would require consecutive quarters of positive growth supported by a broader set of sectors rather than depending primarily on normalization in mining or other volatile activities.
Conclusion
Chile's seasonally adjusted real GDP has returned to mild contraction after a modest expansion in the previous quarter. The latest result reinforces the uneven pattern of sequential growth observed across recent quarters.
The weakness is meaningful but does not indicate a broad or severe contraction. Domestic demand remains comparatively resilient, while part of the deterioration is concentrated in mining, primary activities, and the external sector.
The current signal is therefore one of mild contraction and weakened momentum rather than severe economic deterioration. Sustained positive growth across a broader range of activities would be required to establish a stronger recovery.