November 18, 2013 / 3:21 PM / 6 years ago

UPDATE 2-Chile 3rd quarter GDP grows 4.7 pct, surprises on the upside

* Q3 growth eases from same period of 2012

* Domestic demand, investment cooling in Chile

* Finance Minister says Chile on track to grow 4.5 pct this year (Adds finance minister comment, link to report)

SANTIAGO, Nov 18 (Reuters) - Chile’s economy grew a faster-than-expected 4.7 percent in the third quarter compared with a year earlier, boosted by the country’s mining industry, central bank data showed on Monday.

That beat forecasts for an expansion of 4.4 percent, according to a Reuters poll.

It was also faster than the second quarter gross domestic product growth, which was downwardly revised to 4.0 percent from a previous 4.1 percent, the slowest pace of expansion in nearly two years.

Still, it was well under the 5.8 percent rate clocked in the third quarter of 2012, underlining a broader slowdown in the Andean country’s copper-dependent economy.

“Chilean Q3 GDP data were stronger than expected, but this was largely driven by a rebound in mining exports which is unlikely to be sustained,” said Michael Henderson, emerging markets economist at Capital Economics in London.

Domestic demand, which has helped fuel the economy in recent years, cooled to a 1.3 percent expansion from the prior year. That compares to growth of 4.1 percent in the second quarter of 2013 and an expansion of 8.3 percent in the third quarter 2012.

However, Finance Minister Felipe Larrain, later on Monday, said “Domestic demand is slowing but it’s being more than compensated by external demand,” adding that the economy was on track to grow 4.5 percent this year, and could even rev up next year.

In a move to spur economic growth, the bank cut its benchmark rate by 25 basis points to 4.75 percent on Oct. 17, citing slower global expansion, less favorable terms of trade and expectations for cooling domestic demand.

The bank’s next rate-setting meeting is on Tuesday at 6 p.m. local time (2100 GMT). Some in the market are betting on another rate cut.

For a link to the report, please see: here (Reporting by Santiago newsroom; Writing by Anthony Esposito; Editing by W Simon and Theodore d'Afflisio)

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