Chile

Economic and political outline

Economic indicators | Foreign Trade in figures | Sources of economic information | Political outline

Economic indicators

The Chile has one of the most performing economies in Latin America and it is quoted as a role model of economic stability by foreign investors. Chile has pursued generally sound economic policies for nearly three decades. Chile is the largest producer and exporter of copper in the world and country’s economy is largely dependent on rise & fall of the international copper prices. After a slow down to 4% in 2006 due to a dip in copper production, the growth rate of the GDP increase to 6% in 2007. 5% are forecasted for 2008. Chile's independent Central Bank pursues a policy of maintaining inflation arround 4%. Inflation has not exceeded 5% since 1998. Unemployment has hovered in the 8 -10% range in recent years and is expected to remain so in the coming few years in spite of strong economic growth. Most international observers blame the high unemployment rate on Chile’s complicated and restrictive labour laws.

GDP Indicators	2004	2005	2006	2007	2008
GDP (billions USD)	95.82	118.98	145.85	160.78e	166.95e
GDP (constant prices, annual % change)	6.0	5.7	4.0	5.9e	5.0e
GDP per capita (USD)	5,991.98	7,350.79	8,903.35	9,697.66e	9,948.52e
Inflation rate (%)	1.1	3.1	3.4	3.9e	4.1e
Unemployment rate (% of the labor force)	7.8	6.9	6.0	n.c.	n.c.
Current Account (billions USD)	2.08	1.32	5.26	5.89e	3.91e
Current Account (in % of GDP)	2.2	1.1	3.6	3.7e	2.3e

Source: IMF - World Economic Outlook Database; ILO, Laborstat - Yearly Statistics

Note: (e) Estimated data

Socio-demographic indicators	2004	2005	2006
Unemployment rate (%)	7.8	6.9	6.0

Source:

Main sectors of industry

Chile's main activity sectors are mining (copper, gold and silver), manufacturing (food-processing, chemicals, wood and paper) and agriculture (wine growing, sea products and fruit growing). The agricultural sector contributes nearly 5% to the GDP, the industrial sector contributes around 47% and the service sector nearly 48%. Dependence of the economy on copper prices and the production of an adequate food supply are Chile's two major economic problems.

Breakdown of economic activity by sector	Agriculture	Industry	Services
Value added (annual % change)	3.5	2.7	4.6
Value added (in % of GDP)	5.5	46.8	47.7
Employment by sector (in % of total employment)	13.2	23.0	63.9

Source: World Bank - World Development Indicators - last available data.

Monetary indicators	2002	2003	2004	2005	2006
Average annual exchange rate for 1 USD	688.94	691.43	609.37	560.09	530.29

Source: World Bank - World Development Indicators

Foreign trade in figures

Chile's economy is highly dependent on international trade. The share of foreign trade in country’s GDP is above 75%. Chile is strongly committed to free-trade and has signed free trade agreements (FTAs) with several important economies, including U.S.A., China and South Korea. Chile’s top three export partners are: the USA, Japan and China. Copper exports accounted for 45% of Chilean total exports in 2005. Chile's top three import partners are: Argentina, the USA and Brazil. Chile mainly imports mineral fuels & oils, machinery, vehicles, and electric & electronic equipment.

Foreign trade indicators	2002	2003	2004	2005	2006
Imports of goods (millions USD)	15,794	17,941	22,935	30,492	35,903
Exports of goods (millions USD)	18,180	21,664	32,520	41,297	58,116
Imports of services (millions USD)	5,087	5,688	6,780	7,656	8,426
Exports of services (millions USD)	4,386	5,070	6,034	7,020	7,504
Imports of goods and services (annual % change)	2.3	9.7	16.9	17.7	9.4
Exports of goods and services (annual % change)	1.6	6.5	11.7	3.5	4.2
Imports of goods and services (in % of GDP)	31.6	32.4	31.5	32.5	n.c.
Exports of goods and services (in % of GDP)	34.0	36.5	40.6	41.0	n.c.
Trade Balance (millions USD)	2,386	3,723	9,585	10,805	22,213
Trade Balance (including service) (millions USD)	1,684	3,105	8,839	10,169	21,291
Current Account (millions USD)	-580	-779	2,074	1,315	5,256
Current Account (in % of GDP)	-0.9	-1.1	2.2	1.1	3.6
Foreign trade (in % of GDP)	65.7	68.9	72.2	73.6	n.c.

Source: World Bank - World Development Indicators

Main partner countries

Main customers (% of exports)	2006
United States	24.3%
Japan	13.5%
China	10.0%
Netherlands	9.1%
South Korea	3.8%

Main suppliers (% of imports)	2006
United States	16.0%
Argentina	12.9%
Brazil	12.2%
China	10.0%
South Korea	4.7%

Source: 2006

Main products

Main exports (% of exports)	2006
Copper	37.5%
Ores, slag and ash	25.5%
Fish and crustaceans, molluscs	4.8%
Edible fruit and nuts, peel of citrus fruit or melons	4.0%
Wood and articles of wood, wood charcoal	3.5%

Main imports (% of imports)	2006
Mineral fuels, mineral oils	14.8%
Machinery and mechanical appliances	12.0%
Vehicles other than railway or tramway	10.4%
Electrical machinery and equipment	5.8%
Plastics	5.4%

Source: 2006

To see more products: More imports (Intracen Data)
More exports (Intracen Data)

Sources of economic information

Ministries: Ministry of Economy (in Spanish)
Statistical Office: National Statitic Institute
Central Bank: Central Bank of Chile
Stock Exchange: Santiago Stock Exchange
Online newspapers: El Chileno (in Spanish)
El Mercurio (in Spanish)
Search Engines: Google.cl
Buscar.cl
Chile busca
Guia websites

Political outline

Executive Power: President is both the chief of state and head of government, and holds the executive powers. President appoints the Cabinet and has the authority to remove the commanders-in-chief of the armed forces. P resident is elected by popular vote for a single four-year term.
Legislative Power: The legislature is bicameral. The parliament called National Congress consists of: Senate (the upper house) with its members elected by popular vote to serve eight-year terms, and the Chamber of Deputies (the lower house) with its members elected by popular vote to serve four-year. Chile's congressional elections are governed by a unique binomial system that rewards coalition representations. Each coalition can run two candidates for the two Senate and two Deputy seats apportioned to each electoral district and parties are forced to form wide coalitions. Historically, the two largest coalitions (Concertacion and Alianza) split most of the seats in a district. The citizens of Chile enjoy considerable political rights.
Main political parties: The main political parties are: PDC (Christian Democratic Party), PRSD (Radical Social Democratic Party), PS (Socialist Party), PPD (Party for Democracy), RN (National Renewal), UDI (Independent Democratic Union) and PC (Communist Party)
Current political leaders: President: Michelle BACHELET Jeria (since March 2006) – PS, heads center-left Concertacion coalition government.
Next election dates: Presidential: December 2009
National Congress (both Senate and Chamber of Deputies): December 2009