Is The Economy At Risk Of 'Dutch Disease'?

BMI View: Chilean industrial output growth deteriorated for the third consecutive month in July, registering growth of only 1.9% y-o-y. This figure came in lower than expectations, and could point to a potential slowdown in the industrial sector. Indeed, the three-month moving average annual rate, which takes into account monthly fluctuations, is down to 3.7% in July - significantly down from 6.2% in July 2005. As such, BMI is cautious that the Chilean economy could be starting to show the typical symptoms of 'Dutch Disease'.

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