Chile: Selected Issues

International Monetary Fund

No 2025/038, IMF Staff Country Reports from International Monetary Fund

Abstract: The 2024 Article IV Consultation analyzes that the Chilean economy is broadly balanced but modest potential growth has constrained increases in living standards and makes it difficult to address fiscal and social needs. Policy priorities are therefore mainly of structural nature. They include boosting productivity and employment as well as strengthening fiscal, external, and financial sector buffers—particularly in the context of a challenging global environment. Real gross domestic product is expected to expand by 2–2.5 percent in 2025, in line with its potential. Inflation is projected to return to the 3-percent target in early 2026, after the impact of the significant electricity tariff hikes between June 2024 and early 2025 subsides. External risks remain elevated. A cautious data dependent approach to the Expediting investment permit applications and environmental evaluations, fostering an environment for the development of new industries, facilitating R&D, and increasing female labor participation are vital for boosting potential growth.

Keywords: input-output linkage; housing wealth effect; growth slowdown; real estate sector; risk assessment; Pension spending; Exports; Mortgages; Loans; Global; Eastern Europe (search for similar items in EconPapers)
Pages: 75
Date: 2025-02-05
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