WRAPUP 1-Chile economic activity grows at slowest pace in 1-1/2 years

Fri Apr 5, 2013 11:14am EDT

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* Economic activity rose 3.8 pct in Feb from year ago

* It fell in monthly terms for 2nd time in a row

* Growth seen picking up speed in coming months

SANTIAGO, April 5 (Reuters) - Chile's economic activity expanded 3.8 percent in February from the same month a year ago, it slowest pace in nearly a year and a half, constrained by fewer working days, the central bank said on Friday.

The IMACEC indicator of economic activity, considered a proxy for economic growth, also slipped 0.1 percent in February from January, after falling a downwardly revised 0.2 percent in January from December.

Despite the lull, economic activity is expected to pick up speed in coming months, though strikes at many of Chile's ports could weigh on economic activity, Finance Minister Felipe Larrain told reporters after the IMACEC data was published.

"I'd certainly expect a rebound, but we see an effect that goes against that ... for Chile to keep growing and creating jobs we need to have our ports open," Larrain said.

The widespread port strikes in export-dependent Chile are taking a growing toll on copper, fruit and wood pulp shipments in the world's leading red metal producer and leading to millions in lost revenue.

The IMACEC's growth from a year earlier fell short of the expected 4.9 percent rise in February, according to the median estimate of 16 analysts and economists polled by Reuters.

"The result was affected by the fewer days registered in the month, compared with February last year, which was a leap year," the bank said, adding that the mining and services sectors helped lift economic activity.

"The market underestimated the leap year effect, but going forward we're going to have stronger IMACEC figures. In March we see growth closer to 5 percent on the year," said Cesar Guzman, economist with Inversiones Security in Santiago.

"Despite today's data, Chile's economy is growing strongly and that dynamic will continue," Guzman added.

Earlier this week, Chile's central bank cut its 2013 inflation forecast on Tuesday but hiked its projection for growth in gross domestic product to a range of 4.5 percent to 5.5 percent, citing the robust expansion of domestic demand as a risk to the nation's economy.

Chile's economy grew 5.6 percent in 2012.

The central bank calculates its month-on-month IMACEC data in seasonally adjusted terms. A monthly gauge, the IMACEC measures more than 90 percent of the components comprising Chile's gross domestic product, which is published quarterly.

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