Chile Economic Forecast

Chile Economic Outlook

August 7, 2018

Second-quarter growth appears to have sustained the momentum from the exceptional outturn at the beginning of the year. Economic activity rose at an impressive rate throughout the quarter, with average growth comfortably above the levels seen in the past half-decade. Consumer confidence remained in positive territory during the second quarter. Moreover, retail sales rebounded in May and remained elevated in June, pointing to solid household spending in the quarter. Business sentiment, meanwhile, remained upbeat throughout the quarter, suggesting expansionary conditions were sustained amid the improving health of the manufacturing industry. On the other hand, despite remaining sturdy overall, export growth decelerated from the previous quarter in Q2, owing to mounting trade war-related uncertainties and a drop in copper prices in the second half of the quarter. Meanwhile, both consumer and business sentiment inched down in July, signaling a potential cooldown in economic activity at the beginning of Q3.

Chile Economic Growth

Growth is expected to be robust in 2018, with the external sector remaining in the driver’s seat in the second half of the year against the backdrop of still-solid global demand for copper. Furthermore, domestic demand should be upbeat on strong investment growth, particularly in the manufacturing, wholesale trade and services industries. Met the why particular panelists see GDP expanding 3.8% in 2018, which is up 0.2 percentage points from last month’s forecast, and 3.5% 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 Yield4.85-0.44 %Aug 07
Exchange Rate643.10.05 %Aug 07
Stock Market26,919-0.67 %Aug 07

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