Chile Economy Facts
Chile is regarded as the most economically successful country in South America, with steady growth, high investment and low foreign debt. The economy is liberalized and free trade oriented. The mining industry is central and copper alone accounts for half of the export revenue.
Since the colonial era, the economy has been heavily dependent on commodity exports from agriculture and mines. From the 1930s copper extraction was expanded with the help of capital from the United States. Chile has been the world’s largest copper producer since the early 1980s. At most, copper accounted for around 80 percent of exports. In addition to other minerals and metal products (see Natural Resources, Energy and the Environment), products that have taken over part of the copper’s role include vegetables, fruits, wine, wood and fish.
- Countryaah.com: Major imports by Chile, covering a full list of top products imported by the country and trade value for each product category.
The economic development has generally been good for a long period. High copper prices and growing metal exports to China have contributed to the positive development. However, the country’s large dependence on trade makes it sensitive to fluctuations in the international economy.
During the 1990s, GDP increased by an average of 8 per cent per year, despite the fact that Chile in 1998-99 experienced a recession. During the 00s, the average was 4 percent and from 2010 growth was around 6 percent per year. The country recovered quickly from the global financial crisis in 2009, when the economy temporarily shrunk. It was mainly saved assets from the income of copper that helped the country on the right course again. However, the growth rate has slowed in recent years.
- Abbreviationfinder.org: Check this abbreviation website to find three letter ISO codes for all countries in the world, including CHL which represents the country of Chile. Check findjobdescriptions to learn more about Chile.
Member of the OECD
The military regime partially recovered from the deep debt crisis of the 1980s by selling off government assets in exchange for the government’s debt being written off. In the 1990s and 2000s, external debt has been sharply reduced in line with the growth of the economy. The well-managed economy, together with reforms in the financial sector, approved Chile in early 2010 as the first South American country to become a member of the economic cooperation organization OECD.
Chile has close to 60 bilateral and regional free trade agreements, including with most Latin American countries, the free trade association Efta (Iceland, Norway, Switzerland and Liechtenstein), Canada, USA, South Korea, China and India and others. Asia, with Japan and China, is the export market that grew the most in the 2000s and China passed the US in 2007 as the largest single customer of the Chilean export companies. However, the United States is still Chile’s most important importing country. Trade with the EU has also increased since a free trade agreement was concluded in 2003.
Chile was also involved when twelve countries around the Pacific signed the Free Trade Agreement TPP (Trans-Pacific Partnership) in 2016. One purpose of the agreement was to counterbalance China’s dominance in Asia. In its original form, the TPP would have covered 40 percent of the world economy, but it failed before it came into force when the US withdrew after Trump’s entry. However, the remaining eleven countries decided to stick to the agreement. They together account for about 14 percent of the world economy and have a total population of over 500 million, which is more than the EU. After some adjustments, they signed in March 2018 under the TPP-11, or CPTPP (Comprehensive and Progressive Agreement for Trans-Pacific Parthership). The agreement means that tariffs will be lowered between the countries and, according to the hopes, will contribute to increased growth. CPTPP includes economic heavyweights such as Japan, Canada and Australia. Other Latin American countries in the CPTPP are Mexico and Peru.
Since 1996, Chile has an association agreement with the South American Customs Union Mercosur, which has resulted in a gradual reduction in tariff rates on a number of products. After a 15-year transition period, virtually all the last trade barriers between Chile and Mercosur were abolished in 2011. Only a small number of goods are still subject to tariff. Mercosur consists of Argentina, Brazil, Paraguay and Uruguay, as well as Venezuela, which is, however, suspended.
FACTS – FINANCE
GDP per person
US $ 15,923 (2018)
US $ 298,231 million (2018)
4.0 percent (2018)
Agriculture’s share of GDP
3.6 percent (2018)
Manufacturing industry’s share of GDP
10.6 percent (2018)
The service sector’s share of GDP
57.9 percent (2018)
2.2 percent (2019)
Government debt’s share of GDP
25.6 percent (2018)
US $ 75,452 million (2018)
US $ 70,783 million (2018)
– US $ 9,157 million (2018)
Commodity trade’s share of GDP
50 percent (2018)
Main export goods
cups, fruits, wines, vegetables, fishmeal, salmon, wood, paper, pulp, frozen agricultural products, soft drinks, electrical equipment
Largest trading partner
USA, Argentina, Brazil, China, Japan, South Korea
The Minister of Education resigns
Minister of Education Felipe Bulnes leaves his post after only five months. He has led fruitless negotiations with the protesting students. This is Piñera’s fourth government reform in a year. The president’s popularity figures have now dropped to 23 percent.
Strikes and student protests
A new nationwide strike begins when negotiations between the government and students are stranded. Police deploy tear gas and water cannons against protesters in the capital, Santiago, on October 18, and around 60 people are arrested.
Increased requirements for free tuition
More than one and a half million people are said to have participated in an unofficial referendum, organized by the teachers’ union, on the education system. Nearly 89 percent are reported to have voted in favor of introducing, among other things, free education at all levels and to re-state the schools.
Continued student protests
The student protests against President Piñera and the government continue with at least 70,000 participants. Police deploy tear gas against violent protesters. Over 270 people are arrested and many injured. An important requirement of the protesters is that the higher education must be free of charge. Students are supported by unions and teachers.
Renovation in the government
In the wake of mining protests earlier this month, President Piñera is conducting a major government reform and is replacing, among other things, the finance, energy, justice and education ministers.
Miners strike and protests
The miners in the state mining giant Codelco carry out their first general strike in 18 years. It happens on the 40th anniversary of President Salvador Allende’s nationalization of the copper industry. The strike takes place in parallel with student protests against university reforms and protests against the construction of a huge hydroelectric dam, Hidro Aysén, in Patagonia.
Strike in protests against the government
Trade unions in the city of Valparaíso are organizing a strike in protest against government policy on issues related to environment, education and labor market issues.