Chile Economic Forecast

Chile Economic Outlook

April 12, 2022

The economy recorded another double-digit annual expansion in Q4, spurred by surging consumer spending and fixed investment amid a falling unemployment rate and sizeable fiscal stimulus. However, the external sector detracted from the overall reading on booming imports. Turning to Q1, momentum appeared to slow notably due to tighter financial conditions, a surge in Covid-19 cases and higher inflation. Economic activity contracted month on month in February after flatlining in January, while through February the unemployment rate spiked and copper output plummeted, and business confidence slumped in March. In the wake of the Ukraine war, the government expanded a fund designed to stabilize domestic fuel prices. Moreover, in April the government presented its Chile Apoya plan, which extends some fiscal benefits and aims to further palliate the impact of higher international energy prices.

Chile Economic Growth

GDP growth will wane notably in 2022 on a tough base effect, high inflation and interest rates, and uncertainty over the content of the new constitution weighing on investment. New Covid-19 variants, the war in Ukraine, a slowdown in China—the key export market—potential flare-ups in social unrest, and policy shifts under the new constitution are factors to watch. FocusEconomics panelists see GDP growing 2.3% in 2022, which is down 0.3 percentage points from last month’s forecast. In 2023, GDP is seen expanding 1.3%.

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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