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Economic and political overview

Economic Overview

Chile, recognized as a high-income economy by the World Bank, has traditionally relied on export-oriented sectors such as mining, agriculture, and forestry, complemented by a stable financial framework. After a modest 0.2% expansion in 2023, real GDP growth in 2024 accelerated to 2.2%. Growth was uneven, with the mining and utilities sectors (16% of GDP) performing strongly in the first three quarters due to resolved mining supply issues and growth in renewable energy. Other sectors, especially construction, grew more slowly, reflecting cyclical adjustments and limited potential in non-mining industries. On the expenditure side, growth was mainly driven by net exports, while consumption and investment remained weak. Real GDP is expected to grow around 2-2.5% in 2025 and the medium term, driven by a recovery in domestic demand and continued growth in mining exports (data IMF).

Concerning public finances, the fiscal deficit for 2024 was estimated at 2.7% of GDP, 0.8% higher than budgeted. Revenue fell short, mainly due to weaker corporate income tax collection, possibly from post-pandemic shifts, and lower VAT from slow domestic demand recovery. Lithium revenues also missed projections due to a sharp price drop. In response, the government cut spending, especially in Q4 2024. The government aims to reduce the fiscal deficit to 1.1% of GDP in 2025 and 0.5% in 2026, although the target seems hard to reach. The debt-to-GDP ratio increased marginally to 41% in 2024, up by 0.6% y-o-y, and is expected to follow an upward trend over the forecast horizon (IMF). Headline inflation increased from 3.4% in December 2023 to 4.5% in December 2024. Non-core inflation drove this rise, primarily due to a 43% increase in regulated household electricity prices (2.2% of the CPI basket) between June and October, following a freeze from 2019 to 2023. The Central Bank continued easing monetary policy, reducing its policy rate from 8.25% at the end of 2023 to 5.0% in December 2024, with a slower pace since June. Long-term rates remain high, reflecting the persistent elevated rates in the U.S. Inflation is projected to return to the 3% target by early 2026, as the impact of electricity tariff hikes fades and service inflation declines.

The labour market remains weaker than pre-pandemic levels. In 2024, employment growth slowed, and labour participation and unemployment rates have yet to return to 2019 levels. Factors contributing to this include cyclical weakness in labour-intensive sectors like construction, a significant rise in real minimum wages, lower labour force participation from seniors and youths, and new labour regulations, such as the gradual reduction of work hours from 45 to 40 hours per week. Overall, real wages rose by 4.1% year-on-year in November 2024. For the year as a whole, the IMF estimated the unemployment rate at 8.5%, with a marginal reduction expected this year (8%). Although poverty rates have seen a decline, with the poverty rate dropping from 8% in 2020 to 5% in 2024, income inequality remains a concern. The Gini coefficient, a measure of income inequality, stood at 0.43 in 2024 according to World Bank data. These indicators underscore the need for sustained policy efforts to address income disparities and promote inclusive economic growth. Additionally, with GDP per capita (PPP) at USD 34,789 in 2024 according to IMF data (the highest in Latin America), ensuring equitable distribution of economic benefits remains paramount for achieving sustainable development and social cohesion.

 
Main Indicators 2023 (E)2024 (E)2025 (E)2026 (E)2027 (E)
GDP (billions USD) 335.64328.72362.24379.15396.05
GDP (Constant Prices, Annual % Change) 0.22.52.42.52.4
GDP per Capita (USD) 16,81516,36517,92718,65719,382
General Government Balance (in % of GDP) -3.4-2.8-1.9-0.6-0.3
General Government Gross Debt (in % of GDP) 39.441.041.641.441.5
Inflation Rate (%) 7.63.94.23.13.0
Unemployment Rate (% of the Labour Force) 8.78.58.07.87.7
Current Account (billions USD) -11.90-7.46-9.92-10.78-11.60
Current Account (in % of GDP) -3.5-2.3-2.7-2.8-2.9

Source: IMF – World Economic Outlook Database , October 2021

Country Risk

See the country risk analysis provided by La Coface.

 

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Main Sectors of Industry

According to the latest data from the World Bank, the agricultural sector contributes 3.5% of Chilean GDP and employs 6% of the active population. Agriculture and livestock farming are the main activities in the central and southern parts of the country. Fruit and vegetable exports have reached historic records due to a deliberate strategy implemented in the 1990s targeting the European, North American and Asian markets. Moreover, Chile is one of the biggest wine producers in the world and its location in the Southern Hemisphere allows the country to offer out-of-season fruits to countries of the Northern Hemisphere. Chile’s export portfolio now features high-value speciality crops such as table grapes, blueberries, and kiwifruit, cultivated under precise irrigation systems and innovative agronomic practices in the Central Valley. In 2024, fruit exports drove Chile’s agricultural sector to record highs, surpassing USD 7 billion, up 20% from 2023. Cherries led with over USD 3.5 billion, followed by table grapes at over USD 1 billion (data National Statistics Institute – INE).

Chile is among the most industrialised countries in Latin America and some of its key industries include mining (copper, coal and nitrate), manufactured products (food processing, chemicals, wood) and agriculture (fishing, viticulture and fruit). Overall, the industrial sector in Chile contributes 29.7% of GDP and employs 22% of the working population. The mining sector is one of the pillars of the Chilean economy, mainly due to large amounts of copper reserves, which make Chile the world's largest copper producer, responsible for over 1/3 of the global copper output. Chile's industrial production index rose 1.1% in 2024, driven by gains in mining and manufacturing (data INE). Mining output increased by 2.2%, boosted by higher copper extraction and processing. Manufacturing grew 0.6%, mainly from increased paper and paper product production. In contrast, the electricity, gas, and water index fell 0.7% from November 2023 due to declines in two of its three components.

The services sector contributes 56.9% of GDP and employs around 72% of the population. The sector has been consistently growing in recent decades, reinforced by the rapid development of communication and information technology, access to education and an increase in specialist skills and knowledge among the workforce. Among the highest-growing sectors in recent years are tourism, retail and telecommunications. In 2024, Chile welcomed over 5.2 million foreign tourists, up 40.4% from 2023 and 15.96% above pre-pandemic levels in 2019, according to the Tourism Undersecretariat. Official governmental figures show that, in Q1 2024, Chile’s service exports hit a record USD 674 million, up 42.7% from the previous year. Key sectors included online gaming, animation, remote education, and specialized services for mining, agriculture, industry, architecture, and banking. IT consulting led the sector, making up 44% of total service exports.

 
Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 6.2 22.1 71.7
Value Added (in % of GDP) 3.5 29.7 56.9
Value Added (Annual % Change) -0.3 1.6 0.9

Source: World Bank - Latest available data.

 
Monetary Indicators 20162017201820192020
Chilean Peso (CLP) - Average Annual Exchange Rate For 1 USD 676.96648.83641.28702.90792.73

Source: World Bank - Latest available data.

 

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Foreign Trade

Chile has a very open economy, highly dependent on international trade, which represents around 61% of its GDP (latest data available). In 2023, the country mainly exported copper (which accounted for 44.9% of exports), salmon and trouts (6.7%) lithium (6.5%), cellulose (2.8%), molybdenum ores and concentrates, and cherries (2.4% each). Imports were led by mineral fuels and lubricants (20.5%), machinery, devices, and parts (18.5%), transport equipment and parts (11.4%), and food (9.% - data Chilean Customs). In the same year, Chile recorded 8,258 exporting companies, the highest in nine years, surpassing pre-pandemic levels. Among them, 4,926 exported manufactured goods, 1,725 shipped agricultural products, and 1,056 provided services abroad. Other key sectors were forestry (480 companies), wine (418), fishing and aquaculture (337), and minerals (252).

Chile's 2023 top exporting partners were China (38.2%), the United States (15.9%), Japan (6.9%), South Korea (6.2%), Brazil (4.5%), and Peru (2%); whereas imports came chiefly from China (22.4%), the United States (20.2%), Brazil (11.0%), Argentina (7.1%), Germany (3.5%), and Japan (2.8% - data Chilean Customs). In 2023, 92.8% of Chile's non-traditional exports went to markets with trade agreements. These exports reached 188 destinations, with growth recorded in 99 of them. 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 an association agreement with the UK, ensuring continued trade relations.

Chile's trade balance has been fluctuating in recent years. According to WTO data, in 2023, Chile exported USD 94.9 million worth of goods, while its imports stood at USD 85.5 million. Exports and imports of services in the same year amounted to USD 9.8 million and USD 19.5 million, respectively. In the same year, the World Bank estimated the country’s trade balance to be positive by 1.3% of GDP (from -4% one year earlier). According to the latest report from the Central Bank, in 2024, Chile's exports reached USD 100.163 billion, a 5.9% increase from the previous year. This growth was driven by record exports of copper concentrates, forest products, fresh fruit, and organic foods. The mining sector led exports with USD 52.280 billion (+9.5%), notably in copper concentrates, copper cathodes, and gold shipments.

 
Foreign Trade Values 20192020202120222023
Imports of Goods (million USD) 69,85559,20792,397104,52985,506
Exports of Goods (million USD) 68,79474,02394,77598,54994,937
Imports of Services (million USD) 16,54713,02718,29123,35319,524
Exports of Services (million USD) 8,4625,5545,9738,5299,866

Source: World Trade Organisation (WTO) ; Latest available data

Foreign Trade Indicators 20192020202120222023
Foreign Trade (in % of GDP) 57.658.264.875.061.0
Trade Balance (million USD) 3,01618,91710,3053,72915,323
Trade Balance (Including Service) (million USD) -5,06911,444-2,188-11,8694,542
Imports of Goods and Services (Annual % Change) -1.7-12.331.91.5-12.0
Exports of Goods and Services (Annual % Change) -2.5-0.9-1.50.8-0.3
Imports of Goods and Services (in % of GDP) 29.726.932.939.529.8
Exports of Goods and Services (in % of GDP) 27.931.332.035.531.1

Source: World Bank ; Latest available data

Foreign Trade Forecasts 20242025 (e)2026 (e)2027 (e)2028 (e)
Volume of exports of goods and services (Annual % change) 4.15.34.93.43.5
Volume of imports of goods and services (Annual % change) 1.36.35.52.63.0

Source: IMF, World Economic Outlook ; Latest available data

Note: (e) Estimated Data

 
International Economic Cooperation
Chile is a member of the following international economic organisations: Latin American Integration Association (ALADI), IMF, Asia-Pacific Economic Cooperation (APEC), G-15, G-77, ICC, Latin American and the Caribbean Economic System, OECD, Mercosur (associate), among others. For the full list of economic and other international organisations in which participates Chile click here. International organisation membership of Chile is also outlined here.
Free Trade Agreements
The complete and up-to-date list of Free Trade Agreements signed by Chile can be consulted here.
 

Main Partner Countries

Main Customers
(% of Exports)		 2023
China 39.4%
United States 15.1%
Japan 7.2%
South Korea 6.3%
Brazil 4.5%
See More Countries 27.5%
Main Suppliers
(% of Imports)		 2023
China 23.2%
United States 20.1%
Brazil 10.3%
Argentina 6.7%
Germany 3.3%
See More Countries 36.5%

Source: Comtrade, Latest Available Data

 

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Political Outline

Current Political Leaders
President: Gabriel BORIC (since 11 March 2022). The president is both chief of state and head of government.
Next Election Dates
General elections (National Congress and President): November 2025
Current Political Context
Chile will hold general elections on 16 November 2025, with a potential run-off on 14 December, to elect a new president and renew the Chamber of Deputies and the Senate. The new officials will take office on 11 March 2026. Incumbent President Gabriel Boric, from the left-wing Apruebo Dignidad party, cannot seek re-election due to constitutional limits on consecutive terms. The government's declining popularity—32% in October 2024—makes it unlikely for the ruling party to secure a successor. While Boric’s coalition avoided a significant defeat, the moderate right made gains in the October 2024 municipal and regional elections. The centre-right Chile Vamos coalition increased its number of city halls, boosting Evelyn Matthei’s profile as a leading presidential contender.
The failure to rewrite the constitution, following parliamentary rejections in September 2022 and December 2023, weakened Boric’s administration. Despite initial successes like raising the minimum wage, reducing the workweek to 40 hours, and increasing mining royalties, the government has struggled to pass reforms in a fragmented legislature, requiring compromises that diluted its proposals.
Main Political Parties
After the 2021 general elections, a ruling coalition was formed, made up of the member parties of the two coalitions that supported Boric's candidacy: Apruebo Dignidad and Democratic Socialism.

Government Alliance is a left coalition currently ruling, including:
- Broad Front (Frente Amplio): formed as a result of the merger of left-wing political parties such as Social Convergence, Democratic Revolution, and Comunes
- Socialist Party (Partido Socialista de Chile): centre-left, social democratic, progressist
- Communist Party of Chile (Partido Comunista de Chile): left-wing, communist, Marxist–Leninist
- Party for Democracy (Partido por la Democracia): centre-left, traditions of democratic socialism and liberal progressiveness
- Liberal Party of Chile (Partido Liberal de Chile): social-liberal
- Radical Party of Chile (Partido Radical de Chile): radical, social-liberal
- Humanist Action (Partido Humanista): left-wing, libertarian socialist, environmentalist
- Social Green Regionalist Federation (Federación Regionalista Verde Social): centre-left to left-wing, green politics, sustainability

The main opposition block is Chile Vamos, a centre-right to right-wing political coalition of three political parties:
- National Renewal (RN): centre-right, conservative
- Independent Democratic Union (UDI): right-wing, conservative, liberal, Catholic
- Political Evolution (Evópoli): centre-right, liberal, conservative

Other opposition parties include:
- Christian Social Party (PSC): religious and social conservatism
- Democrats (Democratas): centre
- Republican Party (Partido Republicano; PLR): is a right-wing populist and conservative.

Executive Power
The President is both the Chief of State and Head of Government, and holds the executive power. The President appoints the Cabinet and has the authority to remove the Commanders-in-Chief of the Armed Forces. He or She is elected by popular vote for a single four-year term and is not eligible for a consecutive re-election.
Legislative Power
The legislature is bicameral. The Parliament (or National Congress) consists of a Senate (the upper house) with its 50 members elected by popular vote to serve eight-year terms (with half of the membership elected alternatively every four years), and the Chamber of Deputies (the lower house) with its 155 members elected by popular vote to serve for four years. Elections follow the Hondt method (proportional representation). The citizens of Chile enjoy considerable political rights.
 

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