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Chile Economic Forecast

Chile Economic Outlook

Flash data computed from monthly economic activity readings suggests that the economy expanded 0.3% quarter on quarter in Q3, buoyed by a sharp rebound in mining output and a more modest return to growth in the services sector. Moreover, GDP should have recorded year-on-year growth in Q3 for the first time since Q4 last year. Turning to the final quarter of 2023, economic activity likely continues to improve thanks to easing inflation and interest rates. In politics, on 30 October, the Constitutional Council finalized its proposal for a new constitution. The text will be submitted to voters in a December referendum. If approved, the constitution would secure the private sector’s dominant role in the economy. However, the latest polls suggest that the text will be rejected due to its right-leaning nature, which would prolong institutional uncertainty and likely weigh on investment.

Chile Inflation

Inflation edged down to 5.1% in September from August’s 5.3%. September’s reading represented the lowest inflation rate since August 2021 but was still well above the Central Bank’s 3.0% target. Inflation should fall further by the end of this year and into 2024 but is set to remain slightly above the Bank’s target through end-2024 amid monetary easing and elevated oil prices.

This chart displays Economic Growth (GDP, annual variation in %) for Chile from 2013 to 2022.

Chile Economic Data

2018 2019 2020 2021 2022
Population (million) 18.8 19.1 19.5 19.7 19.8
GDP (USD bn) 295 278 255 316 301
GDP per capita (USD) 15,737 14,565 13,081 16,064 15,163
GDP (CLP bn) 189,435 195,752 201,429 240,371 262,593
Economic Growth (Nominal GDP, ann. var. %) 5.6 3.3 2.9 19.3 9.2
Economic Growth (GDP, ann. var. %) 4.0 0.7 -6.1 11.7 2.4
Domestic Demand (ann. var. %) 5.0 0.9 -9.4 21.7 2.3
Total Consumption (ann. var. %) 3.6 0.7 -6.6 19.3 3.1
Private Consumption (ann. var. %) 3.8 0.7 -7.4 20.8 2.9
Government Consumption (ann. var. %) 3.1 0.6 -3.5 13.8 4.1
Fixed Investment (ann. var. %) 6.5 4.5 -10.8 15.7 2.8
Exports (G&S, ann. var. %) 4.9 -2.5 -0.9 -1.4 1.4
Imports (G&S, ann. var. %) 8.6 -1.7 -12.3 31.8 0.9
Manufacturing Production (ann. var. %) 2.8 0.8 -2.3 5.3 -2.6
Retail Sales (ann. var. %) 3.8 -1.3 -3.5 28.4 -4.2
Unemployment (% of active population, eop) 7.1 7.1 10.3 7.2 7.9
Unemployment (% of active population, aop) 7.3 7.2 10.6 9.1 7.8
Fiscal Balance (% of GDP) -1.7 -2.9 -7.3 -7.7 1.1
Public Debt (% of GDP) 25.7 28.6 32.3 36.4 37.6
Inflation (CPI, ann. var. %, eop) 2.6 3.0 3.0 7.2 12.8
Inflation (CPI, ann. var. %, aop) 2.4 2.6 3.0 4.5 11.6
Monetary Policy Rate (%, eop) 2.75 1.75 0.50 4.00 11.25
10-Year Bond Yield (%, eop) 4.21 3.14 2.65 5.65 5.32
Exchange Rate (CLP per USD, eop) 694 752 711 852 852
Exchange Rate (CLP per USD, aop) 642 703 791 760 873
Current Account Balance (USD bn) -13.3 -14.5 -5.0 -23.2 -27.1
Current Account Balance (% of GDP) -4.5 -5.2 -1.9 -7.3 -9.0
Merchandise Trade Balance (USD bn) 4.4 3.0 18.9 10.5 3.8
Merchandise Exports (USD bn) 74.8 68.8 74.0 94.8 98.5
Merchandise Imports (USD bn) 70.4 65.8 55.1 84.3 94.7
Merchandise Exports (ann. var. %) 8.6 -8.1 7.6 28.0 4.0
Merchandise Imports (ann. var. %) 14.7 -6.6 -16.2 53.0 12.4
Foreign Direct Investment (USD bn) 13.0 14.4 10.8 13.2 19.8
International Reserves (USD bn) 39.9 40.7 39.2 51.3 39.2
International Reserves (months of imports) 6.8 7.4 8.5 7.3 5.0
External Debt (USD bn) 184 198 208 238 233
External Debt (% of GDP) 62.4 71.3 81.9 75.2 77.6

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