05.06.2026
Chile’s economy remained broadly stable in 2025, although growth slowed in the second half of the year as mining output weakened. Growth is expected to remain moderate in 2026–2027, supported by mining and energy investment, services, private consumption and permitting reforms, but constrained by higher energy costs, fiscal consolidation and soft labour-market conditions. Inflation has returned closer to the Central Bank of Chile’s target range, but energy and transport prices are expected to keep price pressures elevated in 2026 before easing in 2027. Fiscal consolidation remains a priority, as public debt is approaching the authorities’ self-imposed ceiling.
| Indicators | 2025 | 2026 | 2027 |
|---|---|---|---|
| GDP growth (%, yoy) | 2.5 | 2.4 | 2.3 |
| Inflation (%, yoy) | 4.2 | 3.8 | 3.6 |
| Employment rate (% of working-age population, 15+) | 56.6 | 56.6 | 56.6 |
| Fiscal balance (% of GDP) | -2.8 | -1.8 | -1.6 |
| Gross public debt (% of GDP) | 41.4 | 41.7 | 42.8 |
| Current account balance (% of GDP) | -1.2 | -2.5 | -2.5 |
Growth remains moderate
Chile’s real GDP growth reached 2.5% in 2025, supported by services, investment and large mining and energy projects. However, mining output contracted in the second half of the year, limiting overall growth despite stronger non-mining activity.
Growth is projected at 2.4% in 2026 and 2.3% in 2027, close to potential. Investment should remain an important driver, supported by mining, energy and machinery projects, as well as a new permitting law intended to improve investment conditions. However, higher energy costs, tighter global financial conditions and fiscal consolidation are expected to weigh on domestic demand.
Inflation remains close to target but risks persist
Inflation averaged 4.2% in 2025 and returned to the Central Bank’s tolerance band during the year. Monetary easing resumed in 2025, with the policy rate reduced as inflation pressures moderated.
Inflation is projected to remain elevated at 3.8% in 2026 before easing to 3.6% in 2027, still slightly above the 3% target. Higher fuel and transport costs linked to global energy prices are the main near-term risk. Additional pressures could come from exchange-rate movements, food prices and wage costs, although subdued demand should help limit second-round effects.
Labour market remains soft
The employment rate is projected to remain broadly stable at 56.6% in 2025–2027. Unemployment declined to around 8.0% by end-2025, but remained above the pre-pandemic average, reflecting slow growth in labour-intensive sectors, elevated labour costs and weak non-mining investment.
Improving labour-market performance will require stronger productivity growth, higher female labour-force participation, skills development and more dynamic private investment. Labour-market reforms and training policies will be important for adapting to automation, AI and the green transition.
Fiscal consolidation is needed to rebuild buffers
The fiscal deficit reached 2.8% of GDP in 2025, above the structural target, mainly because non-mining revenues underperformed and corrective spending measures were implemented only gradually. Public debt remained at 41.4% of GDP, close to Chile’s self-imposed 45% ceiling, while fiscal buffers have become thinner.
The deficit is projected to narrow to 1.8% of GDP in 2026 and 1.6% in 2027 as revenue improves and spending is restrained. Public debt is expected to rise gradually to 42.8% of GDP by 2027. Preserving credibility will require adherence to the fiscal rule, stronger revenue mobilisation and better control of current expenditure.
External position remains manageable but commodity-sensitive
The current account deficit remained modest at 1.2% of GDP in 2025, supported by high copper prices. It is projected to widen to 2.5% of GDP in 2026–2027 as energy import costs increase and domestic demand supports imports.
Chile’s external position remains supported by copper, lithium, services exports and foreign direct investment. However, it is vulnerable to lower copper demand, weaker Chinese growth, energy-price shocks, global financial tightening and disruptions affecting mining inputs such as sulphuric acid.
Overall outlook
Chile’s outlook remains stable but modest. Growth is expected to remain close to potential in 2026–2027, inflation should gradually move back toward target, and the current account deficit should remain manageable. The main policy challenge is to rebuild fiscal buffers while supporting investment and productivity. Medium-term growth will depend on faster permitting, stronger education and skills outcomes, higher labour-force participation, innovation, export diversification and effective use of Chile’s copper, lithium and renewable-energy advantages.
Sources:
World Bank, Chile Macro Poverty Outlook, April 2026.
International Monetary Fund, World Economic Outlook, April 2026.
International Monetary Fund, Chile: 2025 Article IV Consultation and Flexible Credit Line Review, August 2025.
Central Bank of Chile, Monetary Policy Report, March 2026.
OECD, Economic Outlook, Volume 2026 Issue 1: Chile.
