Chile's Economy Maintains Buoyant Path

Chile's Central Bank released better-than-expected figures August 20, showing that the economy grew an unexpectedly high 5.5 percent over the previous twelve month period. This growth was largely fed by confident domestic demand and a strong labor market. President Sebastián Piñera received more good news: his popularity ratings hit a 15-month high of 36 percent in July in response to his administration's successful steering of the economy through the financial turbulence afflicting the world's major markets. However, the president must still overcome ongoing domestic discontent over a perceived lack of this financial success being distributed across all layers of society.

Read the full AS/COA News Analysis: In a Positive Economy, Piñera Sees Rising Popularity.

Over at Financial Times' Beyondbrics blog, Jude Webber takes a look at Chile’s economic performance over the past year. The 5.5 percent growth rate seen in the first half of the year proved wrong many market expectations about the country's pace of growth.

Chile's Minister of Economy, Development, and Reconstruction Pablo Longueira had this to say: “Chile is again on the path to growth and development,” adding that “despite the pessimistic interpretations that we often hear, the economic slowdown that was forecast so strongly at the start of this year has not happened.”

However, though Chile showed impressive growth over the last year, Alfredo Coutino from Moody’s Analytics suggests the country needs to cool down the fast pace of growth and start considering adjustments to balance out the excess demand generated by the optimistic domestic market.