2025/12/01 | Andrés Pérez M., Vittorio Peretti, Andrea Tellechea & Ignacio Martínez
Non-mining dynamics remain upbeat. The monthly GDP proxy (Imacec) for October rose by 2.2% YoY, above the Bloomberg market consensus of 2.0% (Itaú: 1.7%), consistent with a 0.7% MoM/SA increase (0.4% in September). Non-Mining activity increased by 2.6% YoY, in line with a 0.6% MoM/SA (0.2% in September). The annual increase was mainly explained by the performance of the services and trade sectors. Separately, positive sequential dynamics (MoM/SA) were led by: Services (0.7% MoM/SA; 0.3 pp. of contribution); Mining (1.4% MoM/SA; 0.2 pp. of contribution); Industry (1.4% MoM/SA; 0.10 pp. of contribution). The October print surprised us with a milder mining drop and more dynamic services.
Mining continues to be an activity drag. IMACEC data suggests the economy grew 1.7% YoY in the quarter ending in October (1.6% in 3Q and 3.3% in 2Q), hindered by the 5.6% mining drop, while commerce (6.8% YoY) and services (2.8% YoY) remain upbeat. On a sequential basis, total activity momentum slowed, with activity levels in the quarter flat from the preceding period (3% average in 1H25). Non-mining activity rose 0.9% QoQ/SAAR.
Our Take: October’s Imacec data continues to signal strong non-mining activity momentum. The annual carryover through October stands at 2.4% (NSA), not far from our annual 2025 GDP forecast of 2.5%. Non-mining carryover (NSA) sits a tick below 3%. The solid non-mining activity and improving investment suggest the Central Bank will likely revise its 2026 GDP growth forecast range up at the December IPoM (currently 1.75-2.75%). Our preliminary November IMACEC forecast stands at 2.2% YoY. Looking ahead, consumer sentiment in November remained well below neutral levels at 40.6 (50 = neutral), but the one-year economic outlook is recovering, reaching 52.5 points. However, the recovery in business sentiment confidence has stalled (45 points in November) in recent months, completing nine months in pessimistic ground. Elevated copper prices, falling inflation, lower average borrowing rates, and rebounding investment should contribute to a gradual improvement in household and business sentiment. Additionally, the bulk of the labor market adjustment seems to be behind, as reflected in labor market data over the past few months. We forecast October CPI, to be released on December 5, at 0.3% MoM and 3.5% YoY. Core inflation is also estimated at 3.5%. We see inflation falling swiftly to 3% early next year. With inflation pressures having come in softer than expected by the BCCh, we expect a 25bp rate cut to 4.5% later this month.
