Chile Economic Forecast

Chile Economic Outlook

November 10, 2020

The economy likely rebounded in Q3, after plunging in Q2 due to strict lockdown measures, and available indicators point to a further improvement at the beginning of Q4. Activity expanded month-on-month throughout Q3, benefiting from an improving performance in the non-mining sector. Moreover, retail sales expanded strongly in annual terms in August-September, which, coupled with rising consumer sentiment, suggests household spending started to recover. Moving to Q4, a further improvement in both business and consumer confidence points to firming activity. Meanwhile, in mid-October, Fitch Ratings downgraded Chile’s credit rating from A to A-, citing worsening public finances due to the pandemic and increasing social pressure. Meanwhile, later in the month, voters overwhelmingly backed a plan to rewrite the constitution, raising uncertainty over the scope of government intervention in the economy.

Chile Economic Growth

The economy is seen contracting at a marked pace this year, before rebounding in 2021. A sizable recovery in domestic demand, helped by supportive fiscal and monetary policy measures and the gradual reopening of the global economy, will underpin growth. That said, political uncertainty and possible further waves of the virus cloud the outlook. FocusEconomics panelists see GDP growing 4.9% in 2021, which is up 0.1 percentage points from last month’s forecast. In 2022, GDP is seen expanding 3.4%.

Chile Economy Data

2015 2016 2017 2018 2019
Population (million)18.018.218.418.819.1
GDP per capita (USD)13,68213,79315,08615,91514,766
GDP (USD bn)246251278298282
Economic Growth (GDP, annual variation in %)2.31.71.23.91.1
Consumption (annual variation in %)2.12.73.43.71.1
Investment (annual variation in %)-0.3-1.3-3.14.84.2
Industrial Production (annual variation in %)-  -  -  -  -  
Retail Sales (annual variation in %)3.13.84.34.41.6
Unemployment Rate6.36.56.67.47.2
Fiscal Balance (% of GDP)-2.1-2.7-2.8-1.7-2.8
Public Debt (% of GDP)17.321.023.625.627.9
Money (annual variation in %)10.610.14.79.48.2
Inflation Rate (CPI, annual variation in %, eop)4.42.72.32.63.0
Inflation Rate (CPI, annual variation in %)4.43.82.22.42.3
Inflation (PPI, annual variation in %)-  -  -  -  -  
Policy Interest Rate (%)3.503.502.502.751.75
Stock Market (annual variation in %)9.6-2.815.140.2-7.2
Exchange Rate (vs USD)708.6669.8615.4694.0752.0
Exchange Rate (vs USD, aop)654.6676.5648.9642.1703.3
Current Account (% of GDP)-2.3-2.0-2.3-3.6-3.9
Current Account Balance (USD bn)-5.7-5.0-6.4-10.6-10.9
Trade Balance (USD billion)3.44.97.44.64.2
Exports (USD billion)62.060.768.875.269.9
Imports (USD billion)58.655.961.570.665.7
Exports (annual variation in %)-17.3-2.113.39.3-7.1
Imports (annual variation in %)-14.6-4.710.114.8-6.9
International Reserves (USD)38.640.539.039.940.7
External Debt (% of GDP)65.465.864.961.870.2

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Chile Facts

Value Change Date
Bond Yield3.14-0.44 %Dec 30
Exchange Rate752.00.05 %Jan 01

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