Economic Overview

For the latest updates on the key economic responses from governments to address the economic impact of the COVID-19 pandemic, please consult the IMF's policy tracking platform Policy Responses to COVID-19.

Chile is traditionally considered as a model in Latin America in terms of political and financial transparency. It has also been one of the fastest growing economies in Latin America over the last decade, enabling the country to significantly reduce poverty. However, the World Bank estimates that the impacts of the COVID-19 crisis could reverse years of growth in Chile’s middle-class, reducing its size by nearly two million individuals and pushing new middle-class households back into poverty. Still, even though the country's GDP grew in 2022, growth was slower than the previous year, reaching an estimated 2%, as tighter financial conditions, the withdrawal of pandemic-related support measures, and rising inflation dampened household consumption. In the coming years, the Chilean economy should fluctuate between growth and retraction,with the IMF forecasting a GDP contraction of 1% in 2023 and a growth 2% in 2024.

General government balance closed at -2.6% of GDP in 2022, following a large fiscal response to the COVID-19 pandemic. However, Chile's current budget proposal targets a significant deficit reduction over the next couple of years, with general government balance projected to decrease to -2% in 2023 and -1.4% in 2024. The government's gross debt was estimated at 36.2% of GDP in 2022 and is likely to rise to 36.9% in 2023 and 37.8% in 2024. However, the government aims to stabilise debt over the medium term. According to IMF estimates, inflation reached 11.6% in 2022 and is expected to decrease to 8.7% in 2023 and 4.1% in 2024. Inflation should improve through fiscal austerity measures announced by the Treasury Department, particularly due to 1.6% of GDP in spending cuts over the next four years.  Despite recent efforts to diversify its economy, Chile remains vulnerable to international copper prices, international demand (particularly from China), climate and earthquake risks, inadequate R&D, vulnerable road network and energy grid, high energy prices and a poor educational system (Coface). The long-term outlook for copper prices, therefore, has far-reaching ripple effects for employment, wages, government revenue, and national income in Chile, so the major issue to be tackled by the government in order to revive economic growth is to reinforce commercial cooperation with new trade partners, particularly in Asia.

Chile's relatively high unemployment rate slightly decreased to 7.9% in 2022, influenced mainly by the construction, commerce, and transport sectors, which bounced back after the pandemic. However, the IMF expects the unemployment rate to slightly increase to 8.3% in 2023 and remain stable at 8.2% in 2024. The country has the highest GDP per capita in the region (USD 14,772; Coface), but also high levels of inequality and informality (OECD). Factors in wealth disparity include the current tax system that handicaps mostly lower and middle-income classes. Chile has notably invested heavily in renewable energy, which is expected to account for up to 20% of its energy generation by 2025.

Foreign Trade

Chile has a very open economy, highly dependent on international trade, which represented 64.4% of the country's GDP in 2021 (World Bank). The country mainly exports copper (which accounts for 56.4% of exports), fish fillets and other fish meat (3.3%), iron ores (2.6%), chemical wood pulp (2.5%), and apricots, cherries, and peaches (2.3%). Imports involve petroleum oils (10.3%), motor cars and other vehicles (8.3%), telephone sets (3.7%), petroleum gas (2.9%), and automatic data processing machines (2.4%). According to IMF Foreign Trade Forecasts, the volume of exports of goods and services decreased by 0.4% in 2022 and is expected to increase by 1.3% in 2023 and 3.5% in 2024, while the volume of imports of goods and services decreased by 2.9% in 2022, a rate that's expected to drop to -7.5% in 2023 before increasing to -1.4% in 2024.

Chile's top trade partners are China, the United States, Brazil, Japan, Argentina, South Korea, and Germany. Chile has signed Free Trade Agreements (FTAs) with several important economies, notably the European Union, the United States, China, and South Korea and is a member of the Pacific Alliance since 2012 with Mexico, Colombia and Peru. Its comparative economic advantages (revenue from mining, competitive and counter-seasonal agriculture sector) have given it access to the large markets of North America, Europe and the Asia-Pacific (and recently to other South American countries, especially Brazil). Chile also signed a trade continuity agreement with the UK, ensuring continued trade relations. Challenges to Chilean trade include replacing the failed Union of South American Nations with ProSur to strengthen economic integration and trade relationships in the region (Buenos Aires Times). Additionally, with the world’s largest known copper reserves, Chile is a commodity-based, export-driven economy, which heightened Chile's exposure to the impact of the COVID-19 pandemic, since its economic performance is interlaced with patterns of global demand.

Chile's trade balance remains structurally positive, and attained USD 10,528 million in 2021, a decrease from the previous year, mainly due to a drop in copper output, the country's main export. Imports of goods and services increased 31.3% in 2021, while exports decreased by 1.5% (World Bank). According to WTO data, in 2021, Chile exported USD 94,6 million worth of goods, while its imports stood at USD 91,1 million. As with regards to imports and exports of services in the same year, those amounted to USD 15,7 million and USD 6,6 million respectively.

COVID-19 Country Response

COVID-19 epidemic evolution

To find out about the latest status of the COVID-19 pandemic evolution and the most up-to-date statistics on the COVID-19 disease in Chile, please visit the Chilean government platform with the official data. Official information on the progress of the epidemic in Chile is consolidated by the Ministry of Health, which provides a daily epidemiological updates including key national figures.
For the international outlook you can consult the latest situation reports published by the World Health Organisation as well as the global daily statistics on the coronavirus pandemic evolution including data on confirmed cases and deaths by country.

Sanitary measures

To find out about the latest public health situation in Chile and the current sanitary measures in vigour, please consult the Chilean government platform on COVID-19 and the website of the Ministry of Health including the up-to-date information on the containment measures put in place and public health recommendations.

Travel restrictions

The COVID-19 situation, including the spread of new variants, evolves rapidly and differs from country to country. All travelers need to pay close attention to the conditions at their destination before traveling. Regularly updated information for all countries with regards to Covid-19 related travel restrictions in place including entry regulations, flight bans, test requirements and quarantine is available on TravelDoc Infopage.
It is also highly recommended to consult COVID-19 Travel Regulations Map provided and updated on the daily basis by IATA.
The US government website of Centers of Disease Control and Prevention provides COVID-19 Travel Recommendations by Destination.
The UK Foreign travel advice also provides travelling abroad advice for all countries, including the latest information on coronavirus, safety and security, entry requirements and travel warnings.

Import & export restrictions

For the information on all the measures applicable to movement of goods during the period of sanitary emergency due to the COVID-19 outbreak (including eventual restrictions on imports and exports, if applicable), please consult the national Customs authority website.
For a general overview of trade restrictions due to COVID-19 pandemic, please consult the section dedicated to Chile on the International Trade Centre's COVID-19 Temporary Trade Measures webpage.

Economic recovery plan

For the information on the economic recovery scheme put in place by the Chilean government to address the impact of the COVID-19 pandemic on the Chilean economy, please visit the website of the Ministry of the Economy. Additional information in English is available on KPMG's website.
For the general overview of the key economic policy responses to the COVID-19 outbreak (fiscal, monetary and macroeconomic) taken by the Chilean government to limit the socio-economic impact of the COVID-19 pandemic, please consult the section dedicated to Chile in the IMF’s Policy Tracker platform.

Support plan for businesses

For the information on the local business support scheme established by the Chilean government to help small and medium-sized companies to deal with the economic impacts of the COVID-19 epidemic on their activity.
For a general overview of international SME support policy responses to the COVID-19 outbreak refer to the OECD's SME Covid-19 Policy Responses document.

Support plan for exporters

To find out about the support plan for exporters put in place by the Chilean government, please consult the support plan for Chilean exporting companies available on the official portal ProChile.