March 2, 2020 / 1:35 PM / a month ago

UPDATE 2-Chile's economy beats expectations in January following protests

(Adds analyst comment, quote from finance minister)

By Dave Sherwood

SANTIAGO, March 2 (Reuters) - Chile’s economy expanded 1.5% in January on steady growth in mining in the world’s top copper producer, the central bank said on Monday, again proving more resilient than expected following months of protests in late 2019.

The bank’s IMACEC economic activity index encompasses about 90% of the economy tallied in gross domestic product figures.

Mining activity rose 2.2% in January, while non-mining growth hit 1.5%, the bank said, buoyed primarily by the service and construction sectors.

The results beat the expectations of analysts polled by the central bank in February, who put economic growth at less than 1% in the first quarter of 2020 after mass protests in late 2019 over the high cost of living and entrenched inequality.

Finance Minister Ignacio Briones told reporters the better-than-anticipated results were good news, but he warned against complacency.

“This level of economic growth is no reason to celebrate,” he said, adding a full recovery was still distant and tenuous.

Rioters late last year lit fire to buildings, looted grocery stores and destroyed public infrastructure in Santiago and elsewhere in the country, prompting the central bank to slash its 2020 growth forecast to under 1.5% from 2.75% to 3.75%.

Although the unrest subsided in January following the announcement of a referendum on a new constitution, episodes of violence persist and protests are expected to begin anew this month.

University of Santiago economist Victor Salas said the IMACEC result proved the Chilean economy, long considered the most stable in Latin America, was more resilient than many had foreseen.

“But what happens in March ... is crucial,” Salas added. (Reporting by Dave Sherwood; Editing by Steve Orlofsky and Peter Cooney)

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