(Bloomberg) -- Chile’s economic activity expanded for the second straight month in November as industry and commerce gained, reflecting support from real wage growth and the central bank’s interest rate cuts.

The Imacec index, a proxy for gross domestic product, rose 0.3% from October, more than the 0.2% median estimate from analysts in a Bloomberg survey. From a year earlier, activity increased 2.1%, the central bank reported on Thursday.

Policymakers led by Rosanna Costa are contending with above-target inflation and months of volatile economic activity. While prospects for exports are strong and wages are increasing above inflation, private consumption and bank lending have been lackluster. Still, the monetary authority said last month it may pause its easing cycle on consumer price threats including a depreciated peso.

What Bloomberg Economics Says

“November data show uneven and volatile Chile activity despite a monthly advance — signaling a rise in fourth-quarter GDP, but growth below potential and central bank forecasts. With weak labor-market conditions and tight monetary policy, we expect the central bank to continue cutting interest rates. Persistently high inflation may delay the next move, though.”

— Felipe Hernandez, Latin America economist

Industry jumped 2.2% on the month in November, snapping a streak of three straight declines, according to the central bank. Commerce increased 1.1% during the period. On the other hand, mining fell 0.4%.

The nation’s gross domestic product likely expanded 2.3% in 2024 and will grow between 1.5% and 2.5% in 2025, according to central bank estimates published on Dec. 18. Policymakers lowered forecasts for both investment and domestic demand this year and warned of global uncertainty from factors including geopolitical tensions, changes to trade and the new government in the US.

Central bankers have reduced borrowing costs by a total of 6.25 percentage points since mid-2023, to the current level of 5%. Annual inflation slowed to 4.2% in November and policymakers expect it to hit the 3% target in early 2026.

Chile’s unemployment rate fell to 8.2% in the three months through November, below all estimates in a Bloomberg survey of analysts. Still, many economists have emphasized that job creation remains weak.