Chile Economic Forecast

Chile Economic Outlook

December 4, 2018

Growth dropped notably in the third quarter, after hitting a six-year high in the second quarter, amid faltering mining activity and weak external sector metrics. Mining GDP contracted for the first time in over a year in the quarter, largely as a result of lower copper output. In turn, this weighed on Chilean exports growth, which recorded the weakest print since Q2 2017. On the domestic front, private consumption lost some traction in Q3, against the backdrop of seven-year high unemployment and intensifying inflationary pressures. On a brighter note, a buoyant construction industry and sustained investment in machinery and equipment propped up solid fixed investment growth in Q3, which ticked up to an over five-year high. Overall, the fundamentals of the economy remain healthy with sequential data signaling a robust expansion in both consumption and investment activity in the third quarter.

Chile Economic Growth

The economy is seen recovering swiftly from the third-quarter slowdown and finishing this year on a strong footing. Growth next year should remain solid, largely driven by sturdy domestic demand, although the pace of expansion will ease from this year’s print amid a moderation in global trade. Moreover, the tightening labor market should prop up higher wages, driving private consumption in turn. Met the why particular panelists see GDP expanding 3.3% in 2019, which is down 0.1 percentage points 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 Yield4.61-0.44 %Dec 14
Exchange Rate683.80.05 %Dec 14
Stock Market26,184-0.67 %Dec 14

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