Latin America Advisor

A Daily Publication of The Dialogue

What Factors Are Driving Chile’s Economic Outlook?

Chile’s government is expecting 7.5 percent economic growth this year. Santiago is pictured above. // File Photo: Pixabay.

Chile’s government this month revised its economic growth outlook for this year to 7.5 percent, up from a previous forecast of 6 percent. However, it expects the economy to expand 2.9 percent in 2022, down from an earlier estimate of 3.5 percent. What are the most important factors driving Chile’s economic outlook for this year and next year? What are the biggest headwinds facing the Chilean economy in the period ahead? How big of a role has the country’s rapid pace of vaccination played in the country’s economic recovery?

Mariana Zepeda, Latin America analyst at FrontierView: “A few short-term factors are driving Chile’s faster-than-expected 2021 rebound: an aggressive vaccination campaign, sky-high copper prices and expanded fiscal stimulus. However, Chile is not out of the woods. On the Covid-19 front, risks remain that new variants could disrupt Chile’s emergence from the pandemic despite high vaccination levels. While higher mobility levels are bound to bolster economic activity in the second half of this year, fiscal stimulus will eventually fade out and with Chileans largely tapped out on pensions savings, consumption levels should begin to moderate. Export revenues from copper are likely to slow into 2022 as well, further raising fiscal risks. This means Chile will need private investment to continue to bolster its recovery momentum and propel labor market recovery, which has stalled in recent months. But an uncertain political environment may complicate that investment recovery. Chile is entering a pivotal moment…”

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The Inter-American Dialogue publishes the Latin America Advisor every business day for a distinguished membership of informed corporate leaders, scholars, and government officials invested in Latin America’s development and future. The Advisor‘s highly regarded Q&A section covers questions submitted by subscribers themselves. Commentators regularly include heads of state, business leaders, diplomats, economists, analysts, and thought leaders from around the world. Many of the world’s largest and fastest-growing companies subscribe to the Advisor. To subscribe click here or for more information, contact Erik Brand, publisher of the Advisor, at

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