CHILE

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The Economy

Economic indicators

The Chilean economy is recognized internationally as one of the most stable, open and competitive in Latin America. Under the social economic model of prevailing markets that has been in place since the military regime, Chile has implemented a series of structural modifications such as the privatization of state companies and the creation of a private pension funds system, multiple funds and individual accounts.

Chile has built its recent economic success on the exportation of raw materials, most notably copper. Indeed, mining is Chile's biggest economic sector. Agriculture and forestry are also key industries.

Codelco Chile, the country's most important state-owned company, is the world's largest copper producer with an estimated 200 years of copper reserves.

With the opening of European and Asian markets, the export of forestry products, vegetables, fruit, fishmeal and fish -most notable salmon- have increased significantly. Chile has also become a leading wine-producing country.

Other areas of opportunity and expansion include tourism. Chile, especially its adventure tourism sub-sector, has benefited from the recent boom in global tourism. This services sector, too, has enormous potential for future development.

YEAR	NOMINAL VALUE (million pesos)	FDI NOMINALValue (US$)		GDP rate %	Exports (millions US$)		Imports (millions US$)		Balance of Payment (millions)
2005	57,262,645	3,828	6.3			40,574	32,637	1,715,7
2006	59,748,954	5,928	4,2			59,000	38,500	1,997,6
2007	62,793,469	7,340	5,1			68.300	47,000	(3,214.1)

¹According to the Central Bank of Chile and the Foreign Investment Committee.

The Global Competitiveness Report for 2009-2010 ranks Chile as being the 30th most competitive country in the world and the first in Latin America, well above from Brazil (56th), Mexico (60th) and Argentina which ranks 85th. The Ease of doing business index created by the World Bank lists Chile as 49th in the world that encompasses better, usually simpler, regulations for businesses and stronger protections of property rights.

Economy of Chile
Currency	Chilean peso (CLP)
Fiscal year	calendar year
Trade organisations	WTO, APEC, SACN, Mercosur (associate), CAN (associate), Unasur
Statistics
GDP	$169.458 billion (2008)
GDP growth	-1.6% (Q3 2009)
GDP per capita	$10,109 (2008)
GDP by sector	agriculture & mining: 22.5%, industry: 25.2%, services: 52.3% (2008)^[5]
Inflation (CPI)	1.5% (2009)
Population below poverty line	13.7% (2006)
Gini index	54 (2006)
Labour force	7.30 million (2009)
Labour force by occupation	agriculture & mining: 13.0%, industry: 21.3%, services: 65.7% (Q4 2009)
Unemployment	9.7% (2009)
Main industries	copper, other minerals, foodstuffs, fish processing, iron and steel, wood and wood products, transport equipment, cement, textiles
External
Exports	$77.21 billion f.o.b. (2008)
Export goods	copper, fish, fruits, paper and pulp, chemicals, wine, other minerals
Main export partners	U.S. 15.6%, Japan 10.5%, China 8.6%, Netherlands 6.7%, South Korea 5.9%, Italy 4.9%, Brazil 4.8%, France 4.2% (2006)
Imports	$41.8 billion f.o.b. (2007 est.)
Import goods	petroleum and petroleum products, chemicals, electrical and telecommunications equipment, industrial machinery, vehicles, natural gas
Main import partners	U.S. 15.6%, Argentina 12.6%, Brazil 11.8%, China 9.7% (2006)
Gross external debt	$49.18 billion (30 June 2007)
Public finances
Public debt	3.6% of GDP (2007 est.)
Revenues	$44.44 billion
Expenses	$31.36 billion (2007 est.)
Economic aid	$0 million (2006)

Main data source: CIA World Fact Book
All values, unless otherwise stated, are in US dollars

Chile's Foreign Investment Law codifies the welcoming attitude toward foreign direct investment, which gives foreign investors the same treatment as Chileans. Registration is simple and transparent, and foreign investors are guaranteed access to the official foreign exchange market to repatriate their profits and capital. The Central Bank decided in May 1999 on the removal of the 1-year residency requirement on foreign capital entering Chile under Central Bank regulations, generally for portfolio investments. A modest capital control mechanism known as the "Encaje," which requires international investors to place a percentage of portfolio investment in non-interest-bearing accounts for up to 2 years, has been effectively suspended through reduction to zero of the applicable percentage; the mechanism could be resurrected depending on economic circumstances.

Total foreign direct investment flows in 2000 contracted to $3.6 billion (3.6 G$), down from $9.2 billion in 1999, and $4.6 billion in 1998. The 2000 figure is about 13% of GDP. In 2000, Chile experienced an outflow of $1.5 billion, largely the result of diminished inward foreign investment and--for a second year running--elevated levels of Chilean direct investment abroad ($4.8 billion).