Chile

Capital: Santiago

Local time:
It is %T:%M %A in Santiago

GDP growth rate: 4.5% in 2013

FDI stock: 139 538 million USD in 2010

Economic trends

Chile has the most performing economy in Latin America and it is considered by foreign investors as a role model of economic stability.  However, it did not escape from the international recession, its economy contracted -1.5% in 2009 due to the drop in the price of copper (the country is the world's largest producer and exporter of copper).  The revival was quick and energetic in 2010 (5%), stimulated by the dynamism of commercial trade, the increase on domestic demand and the important re-launch plan established (its realization was possible thanks to the sovereign wealth and stabilization funds reserves).  The rhythm of its growth should remain fast in 2011-2012. 

Once the revival began, the government started to eliminate gradually the exceptional measures (mainly monetary) taken during the economic crisis.  Following the violent earthquake that shook the country in February 2010, the government is concentrating its efforts in the rehabilitation and reconstruction, with fiscal measures and adapted expenditures.  The authorities have set up a goal of reducing the structural deficit of the central government to 1% of the GDP from now until 2014.  The objective of the independent central bank of Chile is to keep inflation at around 4%.  In the long term, Chile must improve its productivity and break from its dependence in relation to copper and develop its food production. 

Unemployment rate has increased during the crisis, it reached 9% in 2010.  Even though, Chile has one of the highest GDP per capita in Latin America, poverty affects almost 20% of its population and there is a high level of inequality.

Main branches of industry

Chile's economy is dominated by the industrial and the service sectors. These two contribute to almost 95% of the GDP. The main activity sectors in Chile are mining (copper, coal and nitrate), manufactured products (agri-food processing, chemicals, wood) and agriculture (fishing, vineyard, fruits).

The agricultural sector contributes about 4% to the GDP, the industrial sector to more than 40% and the services to more than 50%. About 13% of the population work in the agricultural sector, 23% in the industries and 64% in the services.

The two main challenges in the Chilean economic are: breaking off from its traditional dependence on the price of copper (copper's production represents 50% of the country's exports, the collapse in its price during the financial crisis had a strong effect in Chile's economy) and developing the production of a self-sufficient food supply.

International trade

Chile has a very open economy which depends highly on international trade.  Foreign trade represents more than three fourths of the country's GDP.  Chile respects the terms of free-trade and has signed free-trade agreements (FTAs) with several important economies, especially with the European Union, the United States, China and South Korea.  Chile's top three customers are China, the United States and Japan. The country mainly exports copper, fruits and fish products. 

Chile's main suppliers are the United States, China, Argentina and Brazil.  Imports involve mainly mineral fuels and oil, machinery, vehicles and electric equipment and electronics. 

Chile's trade balance is structurally positive, a trend that should continue.