The World Bank In Chile

Chile has a track record of sound macroeconomic policies and robust institutions and has effectively managed recent global volatility. However, the country faces mounting challenges owing to low growth, subdued investment, and a decade-long productivity stagnation. Mining is expected to support growth over the medium term. On the fiscal front, the government is making additional efforts to achieve its medium-term fiscal balance target, as structural shifts have led to a revenue shortfall. Poverty in Chile is the lowest in the region and has been steadily declining. However, significant regional disparities persist and progress in non-monetary indicators remains limited.

GDP grew by 2.6 percent in 2024, driven by rising mining exports. Investment fell by 1.4 per cent, while consumption grew by a mere 1.0 percent. Unemployment declined slightly to 8.5 percent but remained above the 7.2 percent rate recorded in 2019. Labor informality rates remained high, especially among women, reaching 28.4 percent compared to 24.8 percent among men. Inflation eased to 4.3 percent in 2024, down from 7.6 percent in 2023, but remained above the central bank’s target of 3 percent.

Real GDP growth is expected to be 2.1 percent in 2025, driven by recovering investment and ongoing support for exports, although uncertainty around global trade dynamics could weigh on investment decisions and dampen growth prospects. Short-term cost pressures are expected to keep inflation at about 5 percent in early 2025, but these pressures should ease over the medium term, reaching 4.6 percent by end-2025. Poverty (US$6.85/day, 2017 PPP) and income inequality rates are projected to remain at about 4.6 percent and 43 GINI points in 2025, respectively, and then decline gradually thereafter.

Lower global demand stemming from changing trade policies and heightened uncertainty could have significant indirect effects on Chile, through less demand for its exports and lower copper prices.  Other external risks include tighter credit conditions, which could hinder investment recovery. Domestic risks stem from political uncertainty ahead of the November 2025 elections, with potential policy shifts impacting investor confidence and triggering currency fluctuations.

Last Updated: Apr 29, 2025

The World Bank Group (WBG) has supported Chile’s development for more than 75 years, through a range of instruments including loans, insurance, grants, technical assistance, and knowledge sharing with countries from various regions around the world.

Since receiving in 1948 the first World Bank development loan made to a country outside of Europe, Chile has continued to engage in a joint learning process to tackle its biggest development challenges. This collaboration has been strengthened with the opening of the first World Bank office in Santiago in December 2017, and in 2025 with the opening of the new joint office of the World Bank Group in Chile—which unifies the leadership of the World Bank, which works with the public sector; the International Finance Corporation (IFC), which works with the private sector; and the Multilateral Investment Guarantee Agency (MIGA), which provides guarantees to investors and lenders.

This strategy is based on public policy recommendations for Chile to achieve sustainable and inclusive development and on recommendations to develop a stronger private sector for a more productive and inclusive society.

As of April 2025, the World Bank has an active portfolio that comprises three lending operations for a total of US$600 million, aimed at supporting a green hydrogen financing facility, improving universal primary health care, and moving toward more sustainable and equitable water resources management. There is also a Reducing Emissions from Deforestation and Forest Degradation (REDD+) program for US$26 million and a US$5 million grant for implementation of carbon markets. Five Reimbursable Advisory Services agreements with a total value of US$8.29 million have been signed, and cover topics such as universal primary health care, social protection, transport, and early childhood education.

IFC has actively supported Chile’s private sector in enhancing productivity, promoting inclusion, and advancing sustainability. Some of IFC’s most innovative projects are taking place in the country, including e-buses, green building, special products designed to promote financial inclusion, and tertiary education. In the last fiscal year, IFC’s new commitments in Chile reached a record US$2.9 billion, an almost 300 percent increase compared to the same period the previous year. In terms of industry, the financial sector accounts for 70.6 percent of the total, infrastructure and natural resources for 26.3 percent, and manufacturing, agribusiness, and services for 5.8 percent.

The Multilateral Investment Guarantee Agency (MIGA) issued a guarantee for a bank loan to CODELCO to cover payment obligations under its renewable energy power purchase agreements, thus contributing to the decarbonization of the country’s largest energy consumer and the development of projects that increase the share of clean energy in Chile.

Amid a challenging global context and to help the country boost its growth and productivity, the WBG is unifying its leadership in Chile, supporting both public and private sector priorities. Promoting public-private collaboration will support the creation of quality jobs, paving the way for Chile to move toward more sustainable and inclusive development and share this experience with other countries.

Last Updated: Apr 29, 2025

Green growth acceleration

Chile received the World Bank’s first-ever global loan to promote green hydrogen and support climate change mitigation efforts. The project seeks to boost investment in green hydrogen projects in Chile to help accelerate green growth and energy transition in the country and support its commitment to carbon neutrality by 2050.

Water resources management

Extensive work has also been done to address the country’s water challenges, a key element of development and resilience, including the approval of a loan to advance Chile’s Just Water Transition program and more sustainable and equitable water resources management.

Emission Reductions Payment

Chile received US$5.1 million from the World Bank’s Forest Carbon Partnership Facility (FCPF) for reducing 1.03 million tons of carbon emissions from deforestation and forest degradation. This was the first payment under Chile’s Emission Reductions Payment Agreement (ERPA) with the FCPF, which provides access to up to US$26 million for reducing 5.2 million tons of emissions.

Disaster preparedness

To provide Chile with financial protection to mitigate potential negative economic impacts of earthquakes and the tsunamis that they generate, the World Bank supported Chile’s issuance of a US$630 million catastrophe bond and swap, its largest single-country transaction. This will provide Chile with readily available funds in the event of a disaster, enabling the country to protect its fiscal budget and reduce the potential need to mobilize debt after an event.

Universal primary health care coverage and resilience

The Program for Universal Primary Health Care Coverage and Resilience will improve the population’s access to high-quality health services through innovative measures aimed at increasing the accessibility, resilience, and efficiency of primary health care. This program will help solidify primary health care as the bedrock of health care service delivery.

The project will be implemented gradually and aims to reach 187 of the country’s 346 communes by the end of 2027. A number of cross-cutting measures will also be implemented for the benefit of all Chileans.

Strengthening of State Universities

The Strengthening of State Universities project, which ended in June 2023, made significant achievements in terms of improvements in quality and equity, despite the difficult situation caused by the pandemic. Third-year dropout rates for the most vulnerable students fell by almost 10 percent from 36.6 percent in 2018 to 26.8 percent in 2022. The number of research projects awarded to these universities and the number of professors with doctorates also increased.

Increased efficiency in the delivery of social benefits

In coordination with the Ministry of Social and Family Development, the World Bank is providing technical assistance to the Local Social Management (GSL) project, a municipal one-stop shop where public officials have access to the various programs and subsidies available and accessible to beneficiaries. This new modality of care, which allows for the delivery of better social care and makes public spending more efficient, is already available in 93 percent of Chile’s municipalities and is expected to achieve universal coverage by 2025.

Together with the Undersecretariat for Children, the World Bank has supported the establishment of Local Offices for Children in more than 80 percent of the country’s communes, offering integrated care and the promotion and protection of the rights of children and adolescents.

The program continues to grow to meet the challenges of the new National Support and Care System (Chile Cuida), through which it is expected to provide services and benefits to nearly 75,000 persons with severe dependency, including the elderly and persons with disabilities, and their caregivers throughout Chile.

The knowledge we have gained by working together with Chile has been shared with several countries around the world that face similar development challenges. In recent years, we have received delegations from every region.

Last Updated: Apr 29, 2025