Local markets rallied after Chile elected far-right Jose Antonio Kast as President, but the economic tailwinds have turned turbulent.

SANTIAGO (Reuters) -Chile’s gross domestic product grew 0.7% in the first quarter of 2025 from the previous three-month period, central bank data showed on Monday. The result came in slightly above the 0.5% expansion expected by economists in a Reuters poll. The Andean nation’s economy was up 2.3% in the first quarter from a year earlier, the central bank added, also above the 2.0% forecast in the Reuters poll. Trade, manufacturing, personal services, and agricultural activity were the main contributors to GDP growth, Chile’s central bank said, while mining, financial services and construction registered declines. "Looking ahead, we expect growth to slow gradually over the coming quarters as the impact of temporary drivers fades and external conditions become less favorable," Andres Abadia, chief Latin America economist at Pantheon Macroeconomics, said in a note to clients. The central bank also released on Monday a poll of analysts showing that they expect interest rates to be held at 5% at the bank’s next monetary policy meeting in June.