Economic and Political Overview

flag Chile Chile: Economic and Political Overview

In this page: Economic Outline | Political Outline | COVID-19 Country Response


Economic Outline

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.

Main Indicators 202020212022 (E)2023 (E)2024 (E)
GDP (billions USD) 254.28316.67300.73358.56375.70
GDP (Constant Prices, Annual % Change) -
GDP per Capita (USD) 13,06816,06015,09517,82718,510
General Government Balance (in % of GDP) -1.6-12.1-1.1-1.6-0.9
General Government Gross Debt (in % of GDP) 32.436.338.036.638.5
Inflation Rate (%) 3.04.511.67.94.0
Unemployment Rate (% of the Labour Force)
Current Account (billions USD) -4.95-23.19-27.10-14.93-14.17
Current Account (in % of GDP) -1.9-7.3-9.0-4.2-3.8

Source: IMF – World Economic Outlook Database, Latest data available.

Note : (E) Estimated data


Main Sectors of Industry

Chile is among the most industrialised countries in Latin American and some of its key industries include mining (copper, coal and nitrate), manufactured products (food processing, chemicals, wood) and agriculture (fishing, viticulture and fruit). The industrial sector in Chile contributes 31.7% of GDP and employs 22.3% 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. In 2022, industrial production decreased, mainly led by a drop in copper output due to substandard ore grades, labour woes, and water scarcity.

According to the latest data from the World Bank, the agricultural sector contributes 3.3% of GDP and employs 9% of the active population. Agriculture and livestock farming are the main activities in 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. 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. In 2022, however, unprecedented draughts in the country, specially in key agricultural areas, negatively impacted the agricultural sector.

The services sector contributes 54.6% of GDP and employs around 68.8% of the population. The Chilean economy faces three main challenges: overcoming its traditional dependence on the price of copper, as copper production represents 50% of the country's exports; developing a self-sufficient food supply, as agriculture currently produces less than half of domestic needs; and increasing its productivity, especially in the mining sector. 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. Although the restrictions put in place during the pandemic have had a strong impact on services, the sector registered an overall growth in 2022, with the recovery being mainly driven by education, health, commerce, restaurants, hotels, and transport.

Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 9.0 22.3 68.8
Value Added (in % of GDP) 3.3 31.7 54.6
Value Added (Annual % Change) 2.3 5.1 14.1

Source: World Bank, Latest data available.


Find more information about your business sector on our service Market Reports.

Indicator of Economic Freedom


The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labour freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.

World Rank:
Regional Rank:


Business environment ranking


The business rankings model measures the quality or attractiveness of the business environment in the 82 countries covered by The Economist Intelligence Unit’s Country Forecast reports. It examines ten separate criteria or categories, covering the political environment, the macroeconomic environment, market opportunities, policy towards free enterprise and competition, policy towards foreign investment, foreign trade and exchange controls, taxes, financing, the labour market and infrastructure.

World Rank:

Source: The Economist Intelligence Unit - Business Environment Rankings 2020-2024


Country Risk

See the country risk analysis provided by Coface.


Sources of General Economic Information

Official Government website - list of ministries and public institutions (in Spanish)
Ministry of the Economy, Development and Tourism (in Spanish)
Ministry of Finance (in Spanish)
Ministry of Foreign Affairs (in Spanish)
Ministry of Public Works (in English)
Statistical Office
National Institute of Statistics (in Spanish)
Central Bank
Central Bank of Chile
Stock Exchange
Santiago Stock Exchange
Other Useful Resources
Latin American Economy News - Chile
Online Economic Daily "Pro Chile"
OECD website devoted to Chile
Main Online Newspapers
Diario Financiero
La Tercera
La Nación
24 Horas
BBC News - Chile (in English)
The Economist  - Chile (in English)
Economic Portals
Economic information portal of the Chilean Ministry of the Economy
Economy watch
Business News Americas
Focus Economics Chile

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Political Outline

Current Political Leaders
President: President : Gabriel BORIC (since March 11th, 2022). The president is both chief of state and head of government. There is no de facto vice president. In case the president is unable to perform his duties, his powers are temporarily transferred to the Minister of the Interior, who is then designated as acting president.
Next Election Dates
General elections (National Congress and President): November 2025
Current Political Context
In November 2021, Chile held presidential elections and the left-wing candidate, Gabriel Boric, became the youngest president ever elected in Chile, at 35 years old, as well as the one elected with the highest number of votes in Chilean history. That same year, Chileans went to the ballot boxes to choose the 155 members of the convention intended to draw up the new constitution to replace the country's current military dictatorship-era constitution. The current constitution has been long criticised for contributing to inequality in the country, as it emphasises private property rights, including those over natural resources, as fails to offer social welfare guarantees. A new draft of the constitution was written in 2022, but 62% of Chileans voted against it. The draft revisioned the economic and social model that was imposed on the country by Augusto Pinochet in 1980, address the current political structure (such as replacing the Senate with a Chamber of Regions), the provision of social goods and environmental protection, and also focused on making Chilean society more equal, for example, by requiring that women hold at least 50% of positions in official institutions. After the referendum results, Gabriel Boric said he would work with Congress and civil society to come up with a new proposal that would meet the demands of the people.
Main Political Parties
Chilean political forces are divided between left, centre-left, and centre-right coalitions. After the 2021 general elections, centre-right coalition "Chile Podemos Más" kept their position as the largest bloc in both chambers, followed by the new left-wing coalition "Apruebo Dignidad" (the second largest bloc in the Chamber of Deputies).

Chile Podemos Más (Chile, we can (do) more; former Chile Vamos!) is the current governing centre-right coalition, composed of the following parties:
- Independent Democratic Union (UDI): right-wing, conservative, liberal, Catholic
- Political Evolution (Evópoli): centre-right, liberal, conservative
- National Renewal (RN): centre-right, conservative
- Democratic Independent Regionalist Party (PRI): centre to centre-right, regionalist

Apruebo Dignidad (Approve Dignity) is a left coalition including:
- Humanist Action (Partido Humanista): left-wing, libertarian socialist, environmentalist
- Democratic Revolution (Revolución Democrática): centre-left to left-wing, democratic socialist
- Social Green Regionalist Federation (Federación Regionalista Verde Social): centre left to left-wing, green politics, sustainability
- Communist Party of Chile (Partido Comunista de Chile): left-wing, communist, Marxist–Leninist
- Christian Left of Chile (Izquierda Cristiana de Chile): left-wing, Christian left, Christian socialist             
- Social Convergence (Convergencia Social): left-wing, libertarian socialist, anti-neoliberalist
- Commons (Comunes): left-wing, autonomist, feminist

Some other political parties in the country include:
- Socialist Party (Partido Socialista de Chile): centre-left, social democratic, progressist
- Party for Democracy (Partido por la Democracia): centre-left, traditions of democratic socialism and liberal progressiveness
- Christian Democratic Party (Partido Demócrata Cristiano): centre, self-declared to bridge communism and capitalism

Type of State
A Republic based on parliamentary democracy whereby the President is both Head of State and Head of Government.
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.

Indicator of Freedom of the Press


The world rankings, published annually, measures violations of press freedom worldwide. It reflects the degree of freedom enjoyed by journalists, the media and digital citizens of each country and the means used by states to respect and uphold this freedom. Finally, a note and a position are assigned to each country. To compile this index, Reporters Without Borders (RWB) prepared a questionnaire incorporating the main criteria (44 in total) to assess the situation of press freedom in a given country. This questionnaire was sent to partner organisations,150 RWB correspondents, journalists, researchers, jurists and human rights activists. It includes every kind of direct attacks against journalists and digital citizens (murders, imprisonment, assault, threats, etc.) or against the media (censorship, confiscation, searches and harassment etc.).

World Rank:

Indicator of Political Freedom


The Indicator of Political Freedom provides an annual evaluation of the state of freedom in a country as experienced by individuals. The survey measures freedom according to two broad categories: political rights and civil liberties. The ratings process is based on a checklist of 10 political rights questions (on Electoral Process, Political Pluralism and Participation, Functioning of Government) and 15 civil liberties questions (on Freedom of Expression, Belief, Associational and Organizational Rights, Rule of Law, Personal Autonomy and Individual Rights). Scores are awarded to each of these questions on a scale of 0 to 4, where a score of 0 represents the smallest degree and 4 the greatest degree of rights or liberties present. The total score awarded to the political rights and civil liberties checklist determines the political rights and civil liberties rating. Each rating of 1 through 7, with 1 representing the highest and 7 the lowest level of freedom, corresponds to a range of total scores.

Political Freedom:
Civil Liberties:

Political freedom in the world (interactive map)
Source: Freedom in the World Report, Freedom House


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COVID-19 Country Response

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

Regularly updated travel information for all countries with regards to Covid-19 related 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 UK Foreign travel advice also provides comprehensive travelling abroad advice for all countries, including the latest information on health, safety, security, entry requirements and travel warnings.

Import & export restrictions
A general overview of trade restrictions which were adopted by different countries during the COVID-19 pandemic is available 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 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.
You can also consult the World Bank's Map of SME-Support Measures in Response to COVID-19.


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Latest Update: September 2023