Chile Economic Forecast

Chile Economic Outlook

January 15, 2019

The economy seems to have accelerated in the fourth quarter on the back of upbeat domestic demand and a rebound of mining activity, following a disappointing third quarter. Despite pessimism among consumers, household spending benefited from a tighter labor market and easing price pressures. Supply side dynamics were less encouraging, however, with manufacturing output shrinking in November. In line with business sentiment dipping into negative territory. Meanwhile, the external sector fared poorly in Q4, with export growth contracting for a fifth consecutive month in December, dragged by a drop in copper prices. On the political front, upcoming structural reforms to the highly privatized pension system will ramp up government spending, while gradually increasing worker contributions.

Chile Economic Growth

Growth is seen closing 2018 at 4.0%, with recent momentum offsetting the third-quarter slowdown. Looking ahead, the domestic economy is projected to decelerate somewhat in the near-term, although growth should remain slightly above potential as improving labor market dynamics and moderate inflation buttress household spending. Furthermore, medium- to long-term growth should be supported by booming mining activity, as global demand for copper-made products rises. Met the why particular panelists see GDP expanding 3.3% 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 %)11.28.211.611.14.8
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 %)-0.9-8.2-14.6-5.711.9
International Reserves (USD)41.111.438.611.539.0
External Debt (% of GDP)48.958.265.466.765.3

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Chile Facts

ValueChangeDate
Bond Yield4.55-0.44 %Jan 30
Exchange Rate663.90.05 %Jan 30
Stock Market27,203-0.67 %Jan 30

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