Chile Economic Forecast

Chile Economic Outlook

December 7, 2017

The economy continues to rev up, with growth increasing markedly in Q3 on the back of greater mining exports and robust private consumption. The latter was likely aided by improved consumer confidence, which reached a multi-year high in October. However, fixed investment declined for the fifth consecutive quarter in Q3, largely due to a weak construction sector. On the political front, Sebastián Piñera won the first round of presidential elections in mid-November. However, the margin of victory was smaller than expected, giving second-round opponent Alejandro Guillier—President Michelle Bachelet’s center-left successor—a realistic shot if he can rally enough support from other left-of-center voters. Simultaneous parliamentary elections led to a fractured congress. Piñera’s Chile Vamos coalition won the most seats, but fell significantly short of a majority, and the left-wing Frente Amplio party emerged as a serious political force, grabbing 20 seats. As a result, whoever wins the second round in December will have to reach a consensus with other groups to govern effectively, which will likely limit radical policy changes.

Chile Economic Growth

Growth should pick up notably next year thanks to greater mining investment, expansive monetary policy and healthy private consumption growth. A stronger regional economy should also boost Chile’s external sector. However, the economy will remain vulnerable to fluctuations in global copper prices. FocusEconomics Consensus Forecast panelists see growth rising to 2.8% in 2018, unchanged from last month’s forecast, and 3.0% in 2019.

Chile Economy Data

Population (million)17.417.617.818.018.2
GDP per capita (USD)15,19115,79614,69813,57413,586
GDP (USD bn)265279262244247
Economic Growth (GDP, annual variation in %)
Consumption (annual variation in %)
Investment (annual variation in %)11.62.2-4.8-0.8-0.8
Industrial Production (annual variation in %)2.20.2-1.20.2-0.8
Retail Sales (annual variation in %)
Unemployment Rate6.
Fiscal Balance (% of GDP)0.6-0.6-1.6-2.2-2.8
Public Debt (% of GDP)12.012.714.917.421.3
Money (annual variation in %)
Inflation Rate (CPI, annual variation in %, eop)
Inflation Rate (CPI, annual variation in %)
Inflation (PPI, annual variation in %)2.1-0.8-5.6-9.20.7
Policy Interest Rate (%)5.004.503.003.503.50
Stock Market (annual variation in %)-8.18.4-22.89.6-2.8
Exchange Rate (vs USD)478.7525.5606.9708.6669.8
Exchange Rate (vs USD, aop)486.3495.6570.8654.6676.5
Current Account (% of GDP)-4.0-4.1-1.7-1.9-1.4
Current Account Balance (USD bn)-10.7-11.5-4.5-4.7-3.6
Trade Balance (USD billion)
Exports (USD billion)78.176.875.162.260.6
Imports (USD billion)75.574.868.658.755.3
Exports (annual variation in %)-4.2-1.7-2.1-17.2-2.5
Imports (annual variation in %)6.8-0.9-8.2-14.4-5.8
International Reserves (USD)41.641.140.438.640.5
External Debt (% of GDP)45.548.357.164.566.3

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Chile Facts

Bond Yield4.63-0.44 %Dec 06
Exchange Rate654.10.05 %Dec 06
Stock Market24,614-0.67 %Dec 06

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