Chile Economic Forecast

Chile Economic Outlook

July 10, 2018

Economic momentum seemingly held up in the second quarter, following an exceptionally strong first quarter, in which the economy expanded at a near five-year high. Economic activity remained elevated in May, after soaring to the highest rate in five years in April. Business confidence remained upbeat throughout Q2, pointing to sustained expansionary conditions and the improving health of the manufacturing industry. Consumer sentiment was also fixed in positive territory in the same period, against the backdrop of a broadly stable inflationary environment and labor market. In turn, retail sales rebounded in May, potentially signaling more solid household spending in the quarter. On the external front, export growth decelerated again in May, but remained generally strong. In a move to capitalize on buoyant copper demand, the government announced on 29 June a USD 1 billion capitalization into the state-owned mining company Codelco, which should ensure sustained production levels going forward.

Chile Economic Growth

Solid global demand for copper should help GDP expand at a five-year high in 2018. Meanwhile, domestic demand will benefit from an accommodative monetary environment and improving labor market conditions, which will spur economic activity. FocusEconomics panelists see growth of 3.6% in 2018, which is up 0.1 percentage points from last month’s forecast, and 3.3% in 2019.

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 Yield4.57-0.44 %Jul 13
Exchange Rate650.40.05 %Jul 13
Stock Market26,850-0.67 %Jul 13

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