Steven Wyble is online content editor at Scotsman Guide Media.
Reach him at (800) 297-6061 or firstname.lastname@example.org.
The Republic of Chile, stretching across South America’s western coast, is one of
the fastest-growing countries in Latin America. A recent uptick in copper prices and
an economy that is slowly gaining some traction suggest the nation may finally be
headed in a positive direction.
Copper plays an outsize role in Chile’s economy. Taxes on copper production make
up about a quarter of the federal government’s tax revenue. Past declines in copper
prices have hammered Chile’s economy, increasing the federal deficit. Between 2011
and 2016, the country’s annual GDP growth fell from 6.1 percent to 1.6 percent.
Standard & Poor’s downgraded Chile’s sovereign debt in 2017 — the first time it has
done so since the 1990s. In response, Chile’s government has adopted a countercycli-cal fiscal policy, increasing spending and reducing taxes to help stimulate economic
Despite declining GDP growth, the country’s unemployment rate has remained relatively stable, hovering around 6. 7 percent, due partly to rising self-employment.
Poverty is trending downward, with the percentage of the population living in
poverty decreasing from 26 percent to 7. 9 percent between 2000 and 2015, according
to the World Bank.
The state of Chile’s copper industry is improving. Copper prices rose about 24 percent
in 2017 thanks to demand from China. Even so, Chilean officials have expressed
caution, noting that prices are unlikely to bounce back to 2011 highs of $4 or more per
pound anytime in the near future.
Chile’s central bank has stated that the rebound in the mining sector was balanced
by a slowdown in construction. In early December 2017, the bank forecasted GDP
growth of between 2.5 and 3. 5 percent in 2018.
The office market in Santiago, Chile’s capital and largest city, improved in the first
part of 2017, according to a report from Cushman & Wakefield. The report predicts an
overall slowdown in office vacancy rates, although new inventory has made it more
difficult to keep vacancy rates low.
Chile’s political landscape was in a state of suspense heading into the national election this past December, with conservative billionaire and former Chilean president
Sebastian Piñera facing off against center-left Senator Alejandro Guillier. Both
candidates pledged to eliminate a tax on Chilean copper miner Codelco — the largest
copper miner in the world — to help it make needed upgrades and better compete
on the world stage. When the votes were counted in the wake of the Dec. 15 election,
Piñera had emerged as the victor, promising a major break in the political and
economic trajectory of his liberal predecessor, Michelle Bachelet. n
By Steven Wyble
Chile’s unemployment rate
as of October 2017
Chile’s GDP growth rate in
Chile’s inflation rate in