Chile: Review Under the Flexible Credit Line Arrangement-Press Release; Staff Report; and Statement by the Executive Director for Chile

International Monetary Fund

No 2025/247, IMF Staff Country Reports from International Monetary Fund

Abstract: This paper presents Chile’s review under the Flexible Credit Line (FCL) Arrangement. The economy is broadly balanced and growing at its potential, supported by a pickup in mining exports and a recovery in consumption. Chile continues to qualify for the FCL by virtue of its very strong economic fundamentals and institutional policy frameworks, and sustained track record of strong macroeconomic policies. External risks have increased since the approval of the FCL arrangement in August 2024. In the context of the still elevated external risks, the authorities expressed a desire to maintain the current level of access and are committed to gradually lowering access conditional on external risk developments. The authorities intend to continue to treat the FCL as precautionary and gradually exit conditional on external risk developments. In a drawing scenario, the FCL would not be used for budget financing, consistent with Chile’s institutional framework.

Keywords: qualification criteria; two-year inflation expectation; FCL arrangement; headline inflation; headline deficit; Inflation; Metal prices; Global (search for similar items in EconPapers)
Pages: 48
Date: 2025-08-28
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