Chile Country Risk Report

Providing comprehensive data and in-depth analysis of political, financial and economic risk.

Report includes: BMI's Core Views, 10-year Forecasts, BMI's Economic Risk Index, Political Stability and Risk Index, Long-term Political Outlook, Operational Risk Index, SWOT Analysis and Structural Economic Sections

Why you should buy this report

  • Understand and measure the political, business environment and operational risks to your company
  • Gain insight on emerging trends that could support, strengthen or disrupt your activities in the market
  • Benefit from 10-year macroeconomic forecasts and insight into the structural characteristics of the economy
  • Get the long-term political outlook and explore possible scenarios for change
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Chile Country Risk Report
Product Price
$1,195.00

Core Views

  • Real GDP growth in Chile will remain modest in 2016, as copper sector weakness will continue to drag on economic activity. Rising prices will buoy the copper sector heading into 2017 and investment into non-copper sectors will become a key driver of economic growth.

  • Chile's current account deficit will widen modestly in 2016 as weak copper prices undermine exports. However, a diversifying export base and rising copper prices will support narrowing deficits in the years ahead, while capital inflows support Chile's balance of payments position.

  • The Chilean peso will gradually strengthen in H216 as copper prices begin to trade higher. Tighter monetary policy and improving investor sentiment toward the region will offer tailwinds in the coming quarters, as a diversifying export base reduces the unit's close association with copper prices.

  • The Banco Central de Chile will temper its rate hiking cycle, enacting just one additional rate hike in 2016, in response to decelerating inflation and disappointing economic growth. Supported by the Chilean peso's strength, inflation will fall within the BCC's target range in the coming months.

  • A narrowing fiscal deficit will keep Chile highly creditworthy in the coming years, as tax reforms help to support revenues while political gridlock prevents the passage of any major spending measures.

Key Risks

  • Should the Chinese economy deteriorate more significantly than currently anticipated by the end of the year, copper prices could continue falling, leading to weaker-than-expected export performance, slower growth and a further depreciation of the CLP.

  • Investigations into official corruption could further undermine President Michelle Bachelet's political support and derail her government's reform agenda.

Macroeconomic Forecasts (Chile 2014-2017)
Indicator 2014 2015e 2016f 2017f
e/f = BMI estimate/forecast; Source: BCC, BMI
Real GDP growth, % y-o-y 1.9 2.1 2.1 2.7
Nominal GDP, USDbn 258.5 240.1 246.1 265.6
Consumer price inflation, % y-o-y, eop 4.6 4.4 3.5 2.9
Exchange rate CLP/USD, eop 606.45 708.60 650.00 630.00
Budget balance, % of GDP -1.5 -3.2 -1.8 -1.3
Current account balance, % of GDP -1.3 -2.0 -2.1 -1.4
Executive Summary
5
Core Views
5
Key Risks
5
Chapter 1: Economic Outlook
7
SWOT Analysis
7
BMI Economic Risk Index
7
Economic Growth Outlook
8
Stagnant Growth On Copper Weakness
8
GDP By Expenditure Outlook
9
TABLE: GDP GROWTH FORECASTS
9
TABLE: PRIVATE CONSUMPTION FORECASTS
9
TABLE: GOVERNMENT CONSUMPTION FORECASTS
10
TABLE: GROSS FIXED CAPITAL FORMATION FORECASTS
10
TABLE: NET EXPORTS FORECASTS
10
Fiscal Policy And Public Debt Outlook
11
Spending Reductions Will Narrow Deficit
11
Structural Fiscal Position
12
TABLE: MAIN REVENUE AND EXPENDITURE CATEGORIES
12
External Trade And Investment Outlook
13
Weak Copper Prices Will Weigh On External Accounts
13
Outlook On External Position
14
TABLE: CAPITAL & FINANCIAL ACCOUNT BALANCE
15
TABLE: TOP 5 GOODS IMPORTS IN 2014
16
TABLE: TOP 5 GOODS EXPORTS IN 2014
16
Monetary Policy
17
Inflation Will Stabilise In H216
17
Monetary Policy Framework
18
Currency Forecast
18
CLP: Solidifying Gains In H216
18
TABLE: BMI CURRENCY FORECASTS
19
Chapter 2: 10-Year Forecast
21
The Chilean Economy To 2025
21
Strong Fundamentals And Gradual Diversification Support Robust Growth
21
TABLE: LONG-TERM MACROECONOMIC FORECASTS
21
Chapter 3: Political Outlook
25
SWOT Analysis
25
BMI Political Risk Index
25
Domestic Politics
26
Labour Reform Highlights Government's Divisions
26
TABLE: POLITICAL OVERVIEW
26
Long-Term Political Outlook
27
Broad Stability To Persist
27
Chapter 4: Operational Risk
31
SWOT Analysis
31
Operational Risk Index
31
Operational Risk
32
TABLE: OPERATIONAL RISK
32
Economic Openness
33
TABLE: FREE TRADE AGREEMENTS
35
TABLE: TOP 5 IMPORT PARTNERS & PRODUCT IMPORTS, 2010-2014, USDMN
36
TABLE: FREE TRADE ZONES AND INVESTMENT INCENTIVES
37
Availability Of Labour
38
TABLE: LATIN AMERICA - AVAILABILITY OF LABOUR RISK
39
TABLE: LABOUR FORCE EMPLOYMENT BY SECTOR ('000), 2011-2013
41
TABLE: TOP 10 SOURCE COUNTRIES FOR MIGRANT WORKERS
42
Chapter 5: BMI Global Macro Outlook
45
Global Macro Outlook
45
Emerging Markets Nearing Inflexion Point
45
TABLE: GLOBAL ASSUMPTIONS
45
TABLE: DEVELOPED STATES, REAL GDP GROWTH, %
46
TABLE: BMI VERSUS BLOOMBERG CONSENSUS REAL GDP GROWTH FORECASTS, %
46
TABLE: EMERGING MARKETS, REAL GDP GROWTH, %
47
TABLE: MACROECONOMIC DATA & FORECASTS
49

Assess your risk exposure in Chile with our 100% independent forecasts assessing the pace and stability of this key market. Backed by trusted data from BMI Research's 52 million data point economic forecast model, this report will allow you to measure political, economic, business environment and operational risks in Chile with confidence.

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