Chile Economic Outlook
One of Latin America's wealthiest nations:
Chile's nominal GDP is the fifth largest in Latin America and the among the highest in per capita terms, after Puerto Rico and Uruguay. In recent decades, the country has become known for its sound economic management, open-market policies, private-sector-led economic model and favorable business environment.
Free trade promoter:Chile has dozens of free trade agreements in place. Most notably, it is part of the Pacific Alliance together with Peru, Colombia and Mexico, and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). Chile also boasts free trade deals with China, the EU and the U.S.
Mining powerhouse:Chile is by far the world's largest copper producer, accounting for around a quarter of the global total. As such, copper is the country's key export and an important contributor to government revenue. Moreover, Chile is the world's second-largest producer of lithium, a key component of electric batteries. The current government under President Boric has published a national lithium strategy, which aims for the government to play a key role in developing the lithium industry in the coming years. Chile is also an important producer of agricultural produce such as fish, fruit and wine, and the country's vast extension and contrast of climates provide immense potential for renewable energy generation.
Deteriorating recent conditions:Economic growth slowed from around 6% in 2010–2012 to a mere 2% in 2013–2019. Lower potential for catch-up growth with wealthier nations, lower copper prices, business uncertainty over ex-President Bachelet's statist reforms, and greater political fragmentation weighed on the economy. Moreover, 2019 saw a huge outburst of social unrest, which led to widespread property damage and a process to reform the constitution, which has prolonged business uncertainty. In addition, policymaking has become more populist in recent years, with Congress approving multiple withdrawals from pension funds during the pandemic. The current government under President Boric is struggling to advance its pro-government reform agenda due to stiff parliamentary opposition.
Key challenges:In addition to political fragmentation—which looks set to become entrenched following the abandonment of the constitutional reform process—Chile suffers from high economic inequality, an overreliance on the mining sector, high crime rates, and conflict with the indigenous Mapuche community in the south of the country.
Chile's economic outlook:GDP growth is forecast to roughly track the regional average in the coming years, with Chile's time as Latin America's posterchild seemingly well in the past. While strong demand for the country's mineral exports and investment in the renewable energy and green hydrogen sectors will provide support, political gridlock will continue to hold back progress.
Chile's Macroeconomic Analysis:
Nominal GDP of USD 301 billion in 2022.
Nominal GDP of USD 335 billion in 2023.
GDP per capita of USD 16,805 compared to the global average of USD 10,589.
GDP per capita of USD 15,163 compared to the global average of USD 10,589.
Average real GDP growth of 2.7% over the last decade.
Average real GDP growth of 2% over the last decade.
Sector Analysis
In 2021, services accounted for 65% of overall GDP, manufacturing 9%, other industrial activity 23%, and agriculture 3%. Looking at GDP by expenditure, private consumption accounted for 61% of GDP in 2021, government consumption 14%, fixed investment 25%, and net exports 0%.International trade
In 2021, manufactured products made up 11% of total merchandise exports, mineral fuels 1%, food 20%, ores and metals 62% and agricultural raw materials 5%, with other categories accounting for 1% of the total. In the same period, manufactured products made up 71% of total merchandise imports, mineral fuels 15%, food 11%, ores and metals 2% and agricultural raw materials 1%, with other goods accounting for 0% of the total. Total exports were worth USD 95 billion in 2023, while total imports were USD 79 billion.Main Economic Indicators
Economic growthChile's GDP growth over the last decade was much slower than in the 2000s. The economy experienced steady—albeit muted—growth until 2019. However, the 2019 social unrest and the 2020 COVID-19 pandemic disrupted this trajectory, causing a significant economic contraction. Recovery began in 2021, fueled by rising copper prices and government stimulus measures, though growth slipped back into a low growth trajectory from 2022. To read more about GDP growth in Chile, go to our dedicated page.
Fiscal policy
Chile's fiscal deficit varied notably over the last decade. Early in the decade, high copper prices and robust economic growth contributed to a healthy fiscal position. However, declining commodity prices, social spending increases and the COVID-19 pandemic led to a growing deficit in later years. In 2022 and 2023, the government managed to bring the fiscal balance back under control, aided by high copper prices and spending restraint. Find out more on our dedicated page.
Unemployment
Chile's unemployment rate over the last decade showed fluctuations. Initially, unemployment was relatively low, benefiting from strong copper prices. However, the 2019 social unrest, elevated immigration and the 2020 COVID-19 pandemic disrupted this trend, leading to increased unemployment rates. The unemployment has decreased since the pandemic, though challenges in job market recovery remain amid a high level of informal jobs and muted economic growth. For more information on Chile's unemployment click here.
Inflation
Inflation over the last decade was managed within the central bank's target range of 2 to 4% in the first part of the decade. However, social unrest in 2019, global supply disruptions and fiscal stimulus brought on by the COVID-19 pandemic led to increased inflationary pressures. The central bank responded with monetary tightening to control rising prices. This had the desired effect; inflation subsided in 2023. Go to our Chile inflation page for extra insight.
Monetary Policy
Chile's central bank policy interest rate has fluctuated notably in the last decade. During the 2019 social unrest and the 2020 COVID-19 pandemic, rates were significantly lowered to stimulate the economy. As inflation began rising sharply in 2021, the central bank initiated a series of rate hikes, aiming to curb inflation while cautiously supporting economic recovery amid global and domestic uncertainties. Rates then began to be lowered in 2023 as price pressures ebbed. See our Chile monetary policy page for additional details.
Exchange Rate
Chile's exchange rate over the last decade was influenced by commodity prices, particularly copper, and global economic conditions. The Chilean Peso generally maintained stability in the early part of the decade, supported by strong copper prices. However, the 2019 social unrest, 2020 pandemic, more statist economic policy under the new government elected in 2022, and uncertainty over a new constitution have led to significant depreciation in the last few years. due to economic uncertainties and decreased demand for commodities. For more info on the peso, click here.
Economic situation in Chile
GDP rose by 0.7% quarter on quarter in Q3, reversing a 0.6% decline in Q2, thanks to rebounds in both private and public spending. In contrast, growth in fixed investment and exports slowed. Looking at industrial sectors, transport, commerce, copper mining and manufacturing were key growth drivers, with the economy held back somewhat by lower construction activity plus maintenance work on an iron processing facility.Our panelists currently anticipate a slower rate of sequential GDP growth in Q4 compared to Q3. In politics, recent regional and local elections showed a rise in support for the center-right Chile Vamos coalition. A victory for Chile Vamos in the 2025 national elections would bode well for business sentiment and investment, both of which are currently languishing.Chile Economic Forecasts
Projections out to 2034.54 indicators covered including both annual and quarterly frequencies.
Consensus Forecasts based on a panel of 47 expert analysts.
Want to get insight on the economic outlook for Chile in the coming years? FocusEconomics collects projections out to 2034 on 54 economic indicators for Chile from a panel of 47 analysts at the leading national, regional and global forecast institutions. These projections are then validated by our in-house team of economists and data analysts, and averaged to provide one Consensus Forecast you can rely on for each indicator. This means you avoid the risk of relying on out of date, biased or outlier forecasts. Our Consensus Forecasts can be visualized in whichever way best suits your needs, including via interactive online dashboards , direct data delivery and executive-style reports which combine analysts' projections with timely written analysis from our in-house team of economists on the latest developments in the Chile economy. To download a sample report on the Chile's economy, click here. To get in touch with our team for more information, fill in the form at the bottom of this page.
Chile Economic Indicators
Q&A:
Is Chile doing well economically?
Is Chile financially stable?
What is Chile's largest industry?
Chile exhibits a mixed economic performance. It boasts a high income per head relative to other Latin America nations but grapples with issues like high inequality, an overreliance on the primary sector and political instability.
Chile is recognized for its financial stability, underpinned by prudent economic management, a well-regulated financial system and modest external debt. However, its heavy reliance on copper exports exposes it to global commodity price fluctuations, and it has contended with high inflation and political instability in recent years.
Chile's largest industry is the services sector, which accounts for over half of GDP and employs nearly 70% of the working population. This sector encompasses a wide range of activities, including retail, finance, tourism, and professional services. That said, mining also plays an important economic role.