Economic trends
Although very open, Chile was able to resist the global crisis in 2009 (-1.5% of GDP), as well as to the impact of a violent earthquake that occurred on February 27 2010 and which cost the country an estimated 29,7 billion USD, i.e. 17% of its GDP. Despite the tightening of monetary policy and uncertainty at the international level, the newly resumed growth reached 5.2% in 2010 and 6.5% in 2011, thanks to strong domestic demand. Chile has the best performing economy in Latin America and its growth rate, one of the strongest in the OECD since 2010, should remain sound in 2012. The country is considered by a model of economic stability. Chile, which joined the OECD in January 2010, remains exposed to fluctuations in copper prices, the country being the largest producer and exporter of this metal.
Following the violent earthquake that hit the country in 2010, in 2011 the government continued to focus on rehabilitation and reconstruction through fiscal measures and appropriate spending. The authorities have set themselves the goal of reducing the structural deficit of the central government to 1% of GDP by 2014. The purpose of the independent central bank of Chile is to keep inflation at around 4%. The level of public debt is very low: only 13% of GDP in 2011.
In the long term, Chile must improve its productivity and break from its dependence in relation to copper and develop its food production.
Unemployment rate has exceeded 8% in 2011 and affects mainly the young. Even though Chile has one of the highest GDP per capita in Latin America, poverty continues to affect almost 20% of its population and there is a high level of inequality.
Main branches of industry
Chile's economy is dominated by the industrial and the service sectors. These two contribute to almost 95% of the GDP. The main activity sectors in Chile are mining (copper, coal and nitrate), manufactured products (agri-food processing, chemicals, wood) and agriculture (fishing, vineyard, fruits).
The agricultural sector contributes about 5.2% to the GDP, the industrial sector to more than 24.8% and the services to more than 70%.
About 13% of the population work in the agricultural sector, 23% in the industries and 64% in the services.
The two main challenges in the Chilean economic are: breaking off from its traditional dependence on the price of copper (copper's production represents 50% of the country's exports, the collapse in its price during the financial crisis had a strong effect in Chile's economy) and developing the production of a self-sufficient food supply.
Agriculture and livestock farming are the main activities of the center and the south of the country. Fruit and vegetable exports have reached historical records, thanks to a deliberate strategy of conquering the European, North-American and Asian markets, implemented in the 1990s. Chile benefits from its location in the Southern Hemisphere to offer fruits out of season in the countries of the Nothern Hemisphere.
International trade
Chile has a very open economy which depends highly on international trade. In 2011 foreign trade represented 90% of the country's GDP. Chile respects the terms of free-trade and has signed free-trade agreements (FTAs) with several important economies, especially with the European Union, the United States, China and South Korea.
Chile's top three customers are China, the United States and Japan. The country mainly exports copper, fruits and fish products.
Chile's main suppliers are the United States, China, Argentina and Brazil. Imports involve mainly mineral fuels and oil, machinery, vehicles and electric equipment and electronics.
Chile's trade balance is structurally positive, a trend that should continue. Trading with other countries remains dynamic. Its comparative advantages on the economic level (mining income, competitive and counter-seasonal agriculture) give it access to the large markets of North America, Europe and Asia-Pacific (and recently of South America as well, especially Brazil).
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Last updates: May 2012
