Chile Economic Forecast

Chile Economic Outlook

June 11, 2019

A detailed release confirmed growth markedly decelerated in the first quarter. Fixed investment growth nearly halved while household spending softened, dragged by sluggish gains in employment and downbeat consumer confidence. As for the external sector, exports contracted for the first time in almost two years, as a slump in mining output in Q1—amid adverse weather in February—weighed on copper shipments. Moreover, recent data suggests that the economy remained stunted at Q2’s outset. Although economic activity strengthened slightly in April on a rebound in mining, manufacturing output contracted and merchandise export growth fell for a third consecutive month. Consumption also likely got off to a slow start in the second quarter: In April, retail sales recorded the sharpest fall in at least four years, while consumer sentiment fell to its lowest point in two years in May.

Chile Economic Growth

Growth is projected to decelerate this year, as reignited trade tensions and a slowing global economy weigh on exports. Moreover, sluggish gains in employment growth suggest that private consumption could struggle to sustain momentum. Nevertheless, solid fixed investment, buoyed by upbeat credit growth and an upcoming tax reform, should buffer any slowdown. Met the why particular panelists see GDP expanding 3.1% in 2019, which is down 0.1 percentage points from last month’s forecast, and also 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 Yield3.44-0.44 %Jun 13
Exchange Rate696.10.05 %Jun 13
Stock Market25,768-0.67 %Jun 13

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