Chile Economy Profile 2009

Economy - overview

Chile has a market-oriented economy characterized by a high level of foreign trade and a reputation for strong financial institutions and sound policy that have given it the strongest sovereign bond rating in South America. Exports account for 40% of GDP, with commodities making up some three-quarters of total exports. Copper alone provides one-third of government revenue. During the early 1990s, Chile's reputation as a role model for economic reform was strengthened when the democratic government of Patricio AYLWIN - which took over from the military in 1990 - deepened the economic reform initiated by the military government. Growth in real GDP averaged 8% during 1991-97, but fell to half that level in 1998 because of tight monetary policies implemented to keep the current account deficit in check and because of lower export earnings - the latter a product of the global financial crisis. A severe drought exacerbated the situation in 1999, reducing crop yields and causing hydroelectric shortfalls and electricity rationing, and Chile experienced negative economic growth for the first time in more than 15 years. In the years since then, growth has averaged 4% per year. Chile deepened its longstanding commitment to trade liberalization with the signing of a free trade agreement with the US, which took effect on 1 January 2004. Chile claims to have more bilateral or regional trade agreements than any other country. It has 57 such agreements (not all of them full free trade agreements), including with the European Union, Mercosur, China, India, South Korea, and Mexico. Over the past five years, foreign direct investment inflows have quadrupled to some $17 billion in 2008. The Chilean government conducts a rule-based countercyclical fiscal policy, accumulating surpluses in sovereign wealth funds during periods of high copper prices and economic growth, and allowing deficit spending only during periods of low copper prices and growth. As of September 2008, those sovereign wealth funds - kept mostly outside the country and separate from Central Bank reserves - amounted to more than $20 billion.

GDP (purchasing power parity)

$244.5 billion (2008 est.)
$236.9 billion (2007 est.)
$226.3 billion (2006 est.)
note: data are in 2008 US dollars

GDP (official exchange rate)

$169.6 billion (2008 est.)

GDP - real growth rate

3.2% (2008 est.)
4.7% (2007 est.)
4.6% (2006 est.)

GDP - per capita (PPP)

$14,900 (2008 est.)
$14,500 (2007 est.)
$14,000 (2006 est.)
note: data are in 2008 US dollars

GDP - composition by sector

agriculture: 4.8%
industry: 50.5%
services: 44.7% (2008 est.)

Population below poverty line

18.2% (2005)

Labor force

7.267 million (2008 est.)

Labor force - by occupation

agriculture: 13.2%
industry: 23%
services: 63.9% (2005)

Unemployment rate

7.8% (August-October 2008)
7% (2007 est.)

Household income or consumption by percentage share

lowest 10%: 1.6%
highest 10%: 41.7% (2006)

Distribution of family income - Gini index

54.9 (2003)
57.1 (2000)

Investment (gross fixed)

24% of GDP (2008 est.)

Budget

revenues: $44.79 billion
expenditures: $35.09 billion (2008 est.)

Public debt

5.2% of GDP (2008 est.)
12.8% of GDP (2004 est.)

Inflation rate (consumer prices)

8.7% (2008 est.)
4.4% (2007 est.)

Central bank discount rate

8.25% (31 December 2008)
6% (31 December 2007)

Commercial bank prime lending rate

4.97% (31 December 2008)
8.67% (31 December 2007)

Stock of money

$NA (31 December 2008)
$16.6 billion (31 December 2007)

Stock of quasi money

$NA (31 December 2008)
$80.42 billion (31 December 2007)

Stock of domestic credit

$NA (31 December 2008)
$127.1 billion (31 December 2007)

Industries

copper, other minerals, foodstuffs, fish processing, iron and steel, wood and wood products, transport equipment, cement, textiles

Industrial production growth rate

0.7% (2008 est.)

Electricity - production

50.37 billion kWh (2006 est.)

Electricity - production by source

fossil fuel: 47%
hydro: 51.5%
nuclear: 0%
other: 1.4% (2001)

Electricity - consumption

45.52 billion kWh (2006 est.)

Electricity - exports

0 kWh (2007 est.)

Electricity - imports

1.628 billion kWh (2007 est.)

Oil - production

11,610 bbl/day (2007 est.)

Oil - consumption

253,000 bbl/day (2006 est.)

Oil - imports

222,900 bbl/day (2006 est.)

Oil - exports

32,500 bbl/day (2005)

Oil - proved reserves

150 million bbl (1 January 2008 est.)

Natural gas - production

1.8 billion cu m (2007 est.)

Natural gas - consumption

4.2 billion cu m (2007 est.)

Natural gas - exports

0 cu m (2007 est.)

Natural gas - imports

2.4 billion cu m (2007 est.)

Natural gas - proved reserves

97.97 billion cu m (1 January 2008 est.)

Current Account Balance

$-3.44 billion (2008 est.)
$7.189 billion (2007 est.)

Agriculture - products

grapes, apples, pears, onions, wheat, corn, oats, peaches, garlic, asparagus, beans; beef, poultry, wool; fish; timber

Exports

$66.46 billion (2008 est.)
$67.67 billion (2007 est.)

Exports - commodities

copper, fruit, fish products, paper and pulp, chemicals, wine

Exports - partners

China 15.5%, US 11%, Japan 10.2%, South Korea 5.9%, Brazil 5.7%, Netherlands 5.1%, Italy 4.3% (2008)

Imports

$57.61 billion (2008 est.)
$44.03 billion (2007 est.)

Imports - commodities

petroleum and petroleum products, chemicals, electrical and telecommunications equipment, industrial machinery, vehicles, natural gas

Imports - partners

US 19.1%, China 11.9%, Brazil 9.3%, Argentina 8.8%, South Korea 5.6%, Japan 4.6% (2008)

Reserves of foreign exchange and gold

$23.08 billion (31 December 2008 est.)
$16.84 billion (31 December 2007 est.)

Debt - external

$64.77 billion (31 December 2008)
$55.67 billion (31 December 2007 est.)

Stock of direct foreign investment - at home

$108.3 billion (31 December 2008 est.)
$91.49 billion (31 December 2007 est.)

Stock of direct foreign investment - abroad

$31.57 billion (31 December 2008 est.)
$24.68 billion (31 December 2007 est.)

Market value of publicly traded shares

$132.4 billion (31 December 2008)
$212.9 billion (31 December 2007)
$174.6 billion (31 December 2006)

Economic aid - recipient

$0 (2006)

Currency (code)

Chilean peso (CLP)

Currency (code)

CLP

Exchange rates

Chilean pesos (CLP) per US dollar - 509.02 (2008 est.), 526.25 (2007), 530.29 (2006), 560.09 (2005), 609.37 (2004)

Fiscal year

calendar year