In Q4 2018, GDP rebounded +1.3% q/q after slowing in Q3 (+0.2%), mainly driven by a strong growth in mining (+3.1%) as copper output rose to a historical high. On the demand side, both exports (+1.5% after -0.2% in Q3) and imports (+2.7% after -2.6%) rebounded. GDP grew +3.3% from Q4 2017, mainly driven by consumption, while investment positively contributed to growth for the fifth straight quarter. This puts 2018 annual GDP growth at +4%. Despite the acceleration, inflation went back below the 3% ±1pp target range (at +1.7% in February). This is consistent with the overall trend in Latin America. Hence the central bank could postpone its tightening cycle as the Fed’s pressure to hike rates eases from 2018. Growth will stay strong in 2019 as copper prices stay resilient and progress on the tax reform sustains confidence. But it could slow to +3% given the Chinese mega-stimulus will benefit commodity exporters less than in 2016, and as the statistical carry-over is lower than in 2018.
