Chile's economy is growing at its fastest rate for four years, driven by stronger copper prices and a revival in domestic business and consumer confidence, according to figures published on Monday.

The central bank said year-on-year growth in gross domestic product was 4.8 per cent for the first three months, its best performance for more than three years.

Exports climbed 10 per cent as improving commodity prices offset the impact of a weaker dollar. Imports were up more than 12 per cent as industry increased production and consumers spent more.

Chile, along with other metals producers in the region, has benefited from surging demand from China, which has become the country's second biggest export market after the US. Shipments to China last year - mainly of copper - were worth $1.85bn, up 45 per cent on the year before.

Alfonso Dulanto, Chile's Mining Minister, on Monday began a five-day visit to the country. He aims to consolidate trade links and advance preparations for eventual negotiations on a bilateral accord. Chile this year added a free trade agreement with the US and South Korea to similar deals with Canada, Mexico and the European Union.

Analysts said Monday's GDP figures were in line with expectations after a 6.3 per cent surge in activity for March. Private sector forecasts point to expansion of up to 5 per cent for the full year, compared with last year's 3.3 per cent. The government has also forecast GDP expansion of 5 per cent after six years of patchy growth, including a recession in 1999.

"It was pretty clear coming into this year that the economy was picking up steam," said Ben Laidler, analyst at UBS Warburg in Santiago.

"These numbers certainly confirm that, and we should see things getting even better from here."

He said the lack of short-term inflationary pressures indicated there was still idle production capacity, although rising oil prices and a looming domestic energy crisis could dent the recovery later in the year.

Chile is currently at loggerheads with Argentina, where energy shortages have forced gas producers to reduce trans-Andean flows to Chile by about 40 per cent in the past two months. Electricity generators in some parts of the country have reactivated old coal-fired plants or switched to liquid fuels to guarantee energy supplies.

However, commentators say that exports will continue to underpin growth and even faltering demand from China would be offset by a pick-up in the US.