X
<

Chile's Oct economist survey shows improving confidence in growth

PART:
1
Chile's Oct economist survey shows improving confidence in growth PART 1 OF 1

Chile’s Oct economist survey shows improving confidence in growth

Chile&#8217;s Oct economist survey shows improving confidence in growth

Interested in ECH? Don't miss the next report.

Receive e-mail alerts for new research on ECH

Success! You are now receiving e-mail alerts for new research. A temporary password for your new Market Realist account has been sent to your e-mail address.

Success! has been added to your Ticker Alerts.

Success! has been added to your Ticker Alerts. Subscriptions can be managed in your user profile.

Chile’s Central Bank Economist Survey is published once a month and includes the opinion of over 60% selected economists on various macroeconomic factors, such as inflation, exchange rate, economic activity and monetary policy indicators. It is a useful to tool to gauge economists’ sentiment on the  health of the economy.

The latest survey showed that economists continue to upgrade their 2012 GDP growth expectations, reflecting that the economy may have a strong fourth quarter.  Current 2012 full year growth expectations are at 5.1%, continuing a steady upward trend since the 4.0% reading in January.   The survey also showed the opposite trend for the 2013 GDP expectations, whose  projections started the year at 5.0% and are now hovering around 4.6%.

Another interesting data point from the survey is the expectation of appreciation of the Chilean Peso.  The graph above shows the two month forward expectation of the Chilean Peso vs the US Dollar.  For reference, the line shows the exchange rate at the time.  The key takeaway from the graph is that currently economists expect the exchange rate to remain between 480 and 485 Chilean Pesos per Dollar, with any extremes (as the one in June) expected to revert shortly after.  The last few months, paired with the increased GDP growth expectations from the previous graph, make a strong point for further appreciation.

The takeaway from the indicators shown above are that if the Chilean Peso remains rangebound between 480-485 Chilean Pesos per Dollar and GDP growth picks up, then investments such as iShares MSCI Chile Index Fund (ECH) will likely benefit in the short term.

X

Please select a profession that best describes you: