Chile Economic Forecast

Chile Economic Outlook

September 10, 2019

Growth recovered slightly in the second quarter, thanks to a marginal rebound in mining activity, following a marked downturn in the first quarter. On the expenditure side, domestic activity lost stride in Q2 on weaker public spending and faltering household consumption amid a higher unemployment rate. Fixed investment, however, accelerated on upbeat construction activity. On the external front, the picture was also somewhat bleak. Lower shipments of copper drove the overall contraction in exports in Q2, while a considerable slump in imports led the sector to positively contribute to overall growth. Turning to the third quarter, incoming data has been mixed. Consumer confidence dropped in August, while business sentiment rose in the same month. Meanwhile, merchandise exports dipped in July on a downturn in global copper prices.

Chile Economic Growth

Growth is seen slowing sharply this year. Externally, feeble demand for base metals stemming from ongoing trade wars will weigh on mining activity and, in turn, dent exports. Domestically, still high employment and a weaker peso will curb private consumption growth. Robust investment activity, thanks to cheaper credit conditions, should soften the slowdown, however. FocusEconomics panelists see GDP expanding 2.6% in 2019, which is down 0.2 percentage points from last month’s forecast, and 3.0% in 2020.

Chile Economy Data

20132014201520162017
Population (million)17.617.818.018.218.4
GDP per capita (USD)15,81514,69913,68013,78815,178
GDP (USD bn)279261246250279
Economic Growth (GDP, annual variation in %)4.01.82.31.71.3
Consumption (annual variation in %)5.52.72.12.63.0
Investment (annual variation in %)2.2-4.8-0.3-1.2-2.7
Industrial Production (annual variation in %)-  -  -  -  -  
Retail Sales (annual variation in %)5.22.81.81.62.1
Unemployment Rate6.06.36.36.56.6
Fiscal Balance (% of GDP)-0.6-1.6-2.1-2.7-2.7
Public Debt (% of GDP)12.715.017.321.023.5
Money (annual variation in %)11.28.210.610.14.7
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)-4.0-1.6-2.3-1.6-2.1
Current Account Balance (USD bn)-11.2-4.3-5.7-4.0-6.0
Trade Balance (USD billion)2.06.53.44.97.4
Exports (USD billion)76.875.162.060.768.9
Imports (USD billion)74.868.658.655.961.5
Exports (annual variation in %)-1.7-2.2-17.3-2.113.4
Imports (annual variation in %)-0.9-8.2-14.6-4.710.1
International Reserves (USD)41.140.438.640.539.0
External Debt (% of GDP)49.058.265.466.765.2

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Chile Facts

ValueChangeDate
Bond Yield2.57-0.44 %Sep 04
Exchange Rate722.80.05 %Sep 04
Stock Market24,044-0.67 %Sep 04

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