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Overview

Chile has a track record of sound macroeconomic policies and robust institutions, which enabled it to restore macroeconomic balance after the disruptions created by COVID-19 and its aftermath. Over the past decade, growth averaged 2 percent, while productivity stagnated, constraining the creation of better and higher-paying jobs. Gender gaps in labor market outcomes remain pronounced. While income poverty has significantly declined, regional disparities persist and progress in non-monetary dimensions lags. Inequality of opportunities and low quality of public services constrain upward social mobility.

Real GDP grew 1.9 percent y-o-y in the first half of 2024, largely driven by the mining sector. Gender gaps in the labor market deepened. Unemployment fell to 7.9 percent for men but rose to 9.0 percent for women. Job quality deteriorated, especially among women, with informality reaching levels of 26.9 and 29.9 percent for men and women, respectively. The inflation reduction trajectory since the peak in 2022 hit a bump in March 2024 when inflation started rising again and reached 4.7 y-o-y in August.

In 2024 real GDP growth is expected at 2.5 percent and will converge to potential in 2025 and 2026. The successive adjustments to electricity tariffs will keep inflation above 4 percent in the coming quarters, returning to the 3 percent target by the first half of 2026. Poverty (US$6.85/day, 2017 PPP) and income inequality are estimated to remain around 5 percent and 43 Gini points in 2024, respectively, and fall gradually thereafter.

Reforms focusing on reducing regulatory barriers, fostering technology adoption, promoting competition, improving education and managerial capabilities, and increasing female labor force participation and job quality could help raise potential growth. Chile is expected to benefit from the green transition given its potential for renewable energy and endowment with copper and lithium, critical inputs to electrification. 

Last Updated: Oct 14, 2024

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

*Amounts include IBRD and IDA commitments
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Country Office Contacts

CHILE +562 239 82400
Apoquindo 2929, 1300-A, Las Condes, Santiago
USA +1 202 473-1000
1818 H Street NW, Washington, DC 20433