Chile Economic Forecast

Chile Economic Outlook

June 12, 2018

Growth accelerated notably in the first quarter, with GDP surging to a near five-year high, outpacing market expectations. It was led by robust private consumption growth and stronger fixed investment, reflected in significantly improved consumer and business sentiment throughout Q1. Furthermore, the external sector performed well in Q1. Export growth jumped to an over four-year high on the back of the burgeoning mining sector, while import growth also accelerated, but to a lesser extent. Consequently, the external sector’s contribution to GDP growth improved in the quarter. The growth momentum seemingly carried into Q2, as suggested by recently released economic indicators. Economic activity soared to the the highest rate in five years in April, while business and consumer confidence indicators remained well-entrenched in positive territory in both April and May.

Chile Economic Growth

The economy is seen firing on all cylinders this year, as an accommodative monetary environment and tightening labor market conditions spur domestic demand. Meanwhile, the external sector should be bolstered by robust global demand for copper—Chile’s key export. Nevertheless, a growing possibility of strikes at the Escondida mine clouds the outlook, amid concerns over the wage negotiations that kicked off in early June. Met the why particular panelists see growth of 3.5% in 2018, which is up 0.2 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 %)11.28.211.611.14.8
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 Yield4.60-0.44 %Jun 19
Bond Yield4.60-0.44 %Jun 19
Exchange Rate611.10.05 %Jun 19
Exchange Rate611.10.05 %Jun 19
Stock Market27,455-0.67 %Jun 19
Stock Market27,455-0.67 %Jun 19

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