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Chile’s sound macroeconomic policies led to a recovery from Covid-induced imbalances, including high deficits and inflation. Fiscal and monetary tightening stabilized the economy but stunted 2023 growth. Chile aims for faster, greener, and more inclusive growth, and reforms targeting productivity, technology, competition, and human capital development are crucial for achieving this objective.

Real GDP rose by 0.2 percent in 2023, as domestic demand adjusted after tighter macroeconomic policies during the post-Covid period. Labor market performance has yet to return to pre-pandemic levels. The unemployment rate remained high at 8.5 percent. Gender gaps in the labor market remain pronounced, with women’s labor force participation at 52.6 percent compared to men’s at 71.4 percent. Inflation has continued its descent, closing 2023 at 3.9 percent y-o-y after a determined monetary tightening and receding supply shocks.

Economic activity is forecast to recover gradually towards trend GDP growth of 2.0 percent in 2024. Amid expected modest economic growth and controlled inflation, poverty (US$6.85/ day, 2017 PPP) is projected to reach 5.0 percent in 2024 and will stay around this value in the medium term. The Gini coefficient is projected to remain at 0.43.

A key challenge for Chile is to move towards higher and more inclusive growth. Growth averaged just 2 percent in the six years preceding the pandemic. Targeted reforms to address specific bottlenecks are needed to boost productivity growth, which has been declining for decades. This includes reducing regulatory barriers, fostering technology adoption, promoting competition, enhancing managerial capabilities, and increasing female labor force participation and job quality. Chile is also expected to leverage the global green transition, with both renewable energy and the plan to expand lithium production through public private partnerships potentially contributing to increased growth going forward.

Last Updated: Apr 12, 2024


Chile: Commitments by Fiscal Year (in millions of dollars)*

*Amounts include IBRD and IDA commitments
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CHILE +562 239 82400
Apoquindo 2929, 1300-A, Las Condes, Santiago
USA +1 202 473-1000
1818 H Street NW, Washington, DC 20433