Chile Economic Forecast

Chile Economic Outlook

March 12, 2019

Available data points to a moderation in economic activity in the first quarter, on the heels of a seemingly stronger fourth quarter last year. Despite low inflation, household spending appears to be cooling as reflected by tepid retail trade metrics in January and still negative consumer sentiment in the first two months of the year. On the other hand, a recent rise in copper prices and improved optimism among businesses in February should buttress fixed investment. That said, uneven industrial output through January and paralyzed construction projects could weigh on investment. In the political arena, analysts’ expectations remain pinned to the approval of long-awaited market-friendly reforms on taxes and pensions in the first half of this year; although they are likely to pass, failure to do so could hinder investment and thwart the government’s economic projections.

Chile Economic Growth

Momentum is seen easing this year amid softer domestic activity in H1 and a volatile international backdrop. Household spending is expected to kick-start in the back-end of the year, fueled by increased capacity—thanks to completed investment projects—and subdued inflation. Meanwhile, the Chinese slowdown will put a dampener on export growth in the near-term. Focus Economics panelists see GDP expanding 3.3% in 2019, which is unchanged from last month’s forecast, and 3.1% in 2020.

Chile Economy Data

20132014201520162017
Population (million)17.617.818.018.218.4
GDP per capita (USD)15,79814,67713,65913,75215,118
GDP (USD bn)279262246250278
Economic Growth (GDP, annual variation in %)4.01.82.31.31.5
Consumption (annual variation in %)5.52.72.12.22.4
Investment (annual variation in %)2.2-4.8-0.3-0.7-1.1
Industrial Production (annual variation in %)-  -  -  -  -  
Retail Sales (annual variation in %)5.22.81.81.62.1
Unemployment Rate5.96.46.26.56.7
Fiscal Balance (% of GDP)-0.6-1.6-2.1-2.7-2.8
Public Debt (% of GDP)12.715.017.321.023.6
Money (annual variation in %)11.28.210.610.14.8
Inflation Rate (CPI, annual variation in %, eop)3.04.64.42.72.3
Inflation Rate (CPI, annual variation in %)1.84.44.43.82.2
Inflation (PPI, annual variation in %)-  -  -  -  -  
Policy Interest Rate (%)4.503.003.503.502.50
Stock Market (annual variation in %)8.4-22.89.6-2.815.1
Exchange Rate (vs USD)525.5606.9708.6669.8615.4
Exchange Rate (vs USD, aop)495.6570.8654.6676.5648.9
Current Account (% of GDP)-4.0-1.6-2.2-1.4-1.5
Current Account Balance (USD bn)-11.2-4.3-5.5-3.5-4.2
Trade Balance (USD billion)2.06.53.45.47.9
Exports (USD billion)76.875.162.060.769.2
Imports (USD billion)74.868.658.655.361.3
Exports (annual variation in %)-1.7-2.2-17.3-2.114.0
Imports (annual variation in %)-0.9-8.2-14.6-5.710.9
International Reserves (USD)41.140.438.640.539.0
External Debt (% of GDP)48.958.265.466.765.3

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Chile Facts

ValueChangeDate
Bond Yield4.27-0.44 %Mar 11
Exchange Rate670.70.05 %Mar 11
Stock Market26,808-0.67 %Mar 11

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