Chile 

Chile country policy

Policy established 27 March 2001

• No Restrictions
• The country ceiling is 2000 mln euro
• Early warning signal 1500 mln euro
• - of which was used as at 2011-08-31 2 mln euro

Country class: 2

Chile country facts

Atradius Dutch State Business  Economic Research

Country Report last updated     :  19 October 2011
Country:  CHILE

Political Situation
Despite Social Unrest, Stable

Head of state
President Sebastián Piñera.

Form of government
Coalición por el Cambio.

Internal Economic Situation
Strong Recovery Underway

General situation
Chile enjoys robust domestic fundamentals and political/ institutional stability, resulting in an open economy and high GDP-growth rates. It is the world’s biggest copper producer. After the 2009-recession (a dip in copper prices, subdued external demand and tight credit conditions), the domestic economy strongly recovered fueled by both exports and domestic demand, incl reconstruction after the devastating Febr 2010-earthquake (est. damage $ 30bn).  New projects in the mining and energy sectors and coming on stream of additional export capacity will underpin a positive GDP-growth in the years to come. In 2011Q2 inflation peaked at 3.3%, only slowly moderating in H2 as food and fuel prices moderate somewhat. Strong banking sector. Healthy but highly US$-indebted corporate sector (esp. in construction). Chile is the least corrupted Latin-american country: 21st on the global rank, even (much) better than Belgium, USA, Spain, Italy or Greece. 
 
External Economic Situation
Solid; High Private (Corporate) Debts

Main sources of foreign exchange
Minerals, esp. copper (49%), industrial products (32%), agricultural products (7%).

Main foreign markets
EU (23%), Asia (23%), Latin America (17%), USA (12%).

Main expenses of foreign exchange
Intermediate goods (58%), capital goods (15%).

 
Balance of payments  
High copper prices and export diversification on goods and markets (FTA’s with many countries) have strongly enhanced the external position. Chile is also well advanced with the liberalization of domestic capital markets and the easing of restrictions on capital outflows, enabling private pension funds to diversify their portfolios abroad. BCC regularly intervenes to smooth excessive peso-volatility: after upward pressure on the exchange rate, peso-weakening since mid-2011.