Chile: Selected Issues

International Monetary Fund

No 2024/042, IMF Staff Country Reports from International Monetary Fund

Abstract: This Selected Issues paper studies renewable energy and attempts to estimate the gross domestic product (GDP) impact and assesses the role of policies in Chile. Chile has a comparative advantage in renewable energy. IMF estimates show that replacing coal power with solar and wind power, as announced by the government, could boost the long-term GDP level by at least 1 percentage point. The analysis indicates that the benefits of having targeted support for the transmission of electricity exceed costs. An additional benefit is the greater economic resilience to abrupt increases in coal and fuel prices that can have large negative impacts on the economy. A key constraint for the renewable energy sector is currently the transmission from where it is produced to where it is used. A cost-benefit analysis shows that state support industries, such as electricity transmission, may have economic benefits that outweigh the costs.

Keywords: GDP impact; solvency risk; Chilean bank; Fintech firm; cybersecurity risk; Electricity; Cyber risk; Fintech; Energy sector; Financial inclusion; Global (search for similar items in EconPapers)
Pages: 41
Date: 2024-02-06
New Economics Papers: this item is included in nep-inv
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