Chile: solid start to Q3 could delay monetary easing

Today’s IMACEC activity indicator revealed that Chile’s economy picked up pace at the start of Q3. This is unlikely to signal a turn in the economic cycle following two quarters of slowing growth, but it does suggest that the deceleration that we expect to see in 2013-14 will be relatively gradual. We continue to think that monetary easing is probable over the coming year, but note that the chances of a rate cut within the next couple of months have narrowed considerably.