Chile’s economy is expected to see modest growth in 2024, with a projected 2.4% increase in Gross Domestic Product (GDP) according to the Central Bank of Chile’s Economic Expectations Survey. Despite facing challenges like social unrest, the COVID-19 pandemic, and political uncertainty, the country’s economy managed to grow by 0.2% in 2023.
Inflation continues to be a concern for Chilean policymakers, with a forecasted inflation rate of 0.3% in October 2024. The Central Bank is expected to ease its monetary policy, aligning with a gradual normalization as inflationary pressures subside.
Recovery in household consumption and the commerce sector are expected to drive growth in 2024, though concerns remain about investment levels. International organizations have slightly more conservative growth projections, with the IMF forecasting 2% growth and the World Bank predicting a 1.8% expansion.
Long-term growth challenges persist, with structural issues like productivity improvement, increased investment, and labor market participation enhancement needing to be addressed for sustained growth beyond 2024.
The mining sector, especially copper and lithium, plays a crucial role in Chile’s economy, with favorable projections for copper prices. Political tensions could impact economic growth, as disagreements between the government and opposition parties may hinder crucial economic policy implementation.
Despite challenges, Chile’s sovereign risk remains limited, with moderate public debt at 39.2% of GDP, favorable debt profile, and low contingent debt.