Chile Economic Forecast

Chile Economic Outlook

May 14, 2019

Available data suggests that growth halved in the first quarter of the year. Economic activity lost steam in Q1, dragged by a fall in mining output amid adverse weather in February and a lackluster performance by the manufacturing sector. In turn, merchandise exports fell in Q1 and again in April, on lower copper shipments. In addition household spending is also expected to have flagged: Consumer sentiment remained stuck in negative territory and employment rates rose only marginally, pointing to softer spending. On the other hand, fixed investment likely accelerated modestly, buttressed by upbeat business sentiment linked to higher copper prices; however, the recent downturn in commodity markets, owing to escalating trade tensions, threatens to hinder investment going forward. Meanwhile, on 7 May, Moody’s ratified its A1 credit rating with a stable outlook, noting that the country is well prepared to deal with shocks thanks to its institutional and fiscal strengths.

Chile Economic Growth

Growth is seen slowing this year and risks to the outlook have increased recently as reignited trade tensions could hit the mining economy. Moreover, the glacial pace of employment growth suggests that household spending might struggle to accumulate gains in the near-term. Downside risks to investment growth, linked to further delays on the tax and labor reforms, remain. FocusEconomics panelists see GDP expanding 3.2% 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 Yield4.10-0.44 %May 13
Exchange Rate693.40.05 %May 13
Stock Market25,375-0.67 %May 13

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