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Chile Economic Profile

Chile is one of the most stable high-income countries in Latin America, with a nominal GDP of approximately 310 billion dollars in 2023, ranking third in South America after Brazil and Argentina. The economy is heavily dependent on the mining sector, with copper mining as its core, and copper exports account for approximately 40-50% of national revenue. Lithium mining is also expanding rapidly, benefiting from increased demand accompanying growth in the electric vehicle and battery industries. The agricultural sector is also important, with brisk exports of wine, avocado, and berries.

In recent economic trends, recovery from the COVID-19 pandemic during 2020-2021 progressed, but since 2022, the economy has been affected by inflationary pressure and rising interest rates. Through aggressive monetary tightening by the central bank, inflation rates have been declining but remain at elevated levels. Additionally, following large-scale social movements in 2019, there has been strong public demand for reducing income inequality and enhancing social security, and government spending has continued to increase.

As notable points, first, efforts to transition to green energy stand out. By leveraging abundant solar and wind resources, investment in solar and wind power generation is increasing rapidly, with targets set to achieve renewable energy ratios exceeding 70% by 2030. Second, political stability and institutional strength are being maintained, placing Chile at relatively low risk within Latin America. Third, expectations for the lithium industry are high, and the state-owned company Codelco's lithium strategy has the potential to become a new driver of economic growth.