COMPANY PROFILE

CHILE

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Chile is one of the freest economies in Latin America and open to foreign direct investment, giving foreign investors a similar treatment to granted local investors. It has several trade agreements: it is member of LAIA (Latin American Integration Association), it is an associate member of MERCOSUR and recently became member of the OECD.

Due to the growth of the Chilean economy in recent years, with an average annual growth of 4% since 2004, the GDP per capita reached 15.000 USD (PPP) in 2010, the second highest in Latina America. After the retraction of the activity in 2009 due to the international crisis, the Chilean economy managed to recover in 2010 growing over 5%.

This period of economic growth in recent years resulted in an improvement in labor market. The unemployment rate in 2010 reached 8.3% after the increase experienced in 2009.

GDP (Annual change)		Unemployment rate (Annual average)
Source: Central Bank of Chile

The Chilean exports also showed a significant dynamism, exceeding 70.000 million dollars in 2010 and doubling the value of exports in 2004. The growth of international commodities prices of and emerging markets demand boosted Chilean primary products sales in the last years (mainly metals, agricultural and forest products). Copper is the Chile's main product of export, representing more than a half of total exports of goods in 2010.

GDP per economic activity  (%, current dollars)

Source: Central Bank of Chile

The mining sector is one of the most important in Chile, accounting for 19% of GDP in 2010 (in current dollars). Copper production has a central role and is one of the main sources of public revenue due the contribution of state-owned company Codelco.

Annual inflation (1991-2010)

Source: Central Bank of Chile

Despite economic growth, inflation has been at historically low levels since 2000, ending 2010 with a rate of 3%, which is aligned with the authority’s inflation target.

Foreign investment has been actively involved in the growth cycle of the Chilean economy, with more than 15,000 million dollars in 2010 of FDI, which represents around 7.4% of GDP. The main sectors receiving FDI were: mining, services and electricity, gas and water.

Credit risk rating in long term foreign currency

Chile's external debt exceeded 85,000 million dollars in 2010, just over 42% of GDP. The fiscal deficit is low, 0.4% of GDP in 2010. Due to the low level of external debt and its macroeconomic stability, Chile has the investment grade according to the major rating agencies, and a country risk level of 116 basis points in December 2010 (according to JP Morgan EMBI).

FDI (USD million)

Credit risk rating in long term foreign currency

Source: Central Bank of Chile and foreign investment committee

Chile is one of the two Latin American countries with highest human development, and is ranked 44 in the world, as well as it has high life expectancy and a high level of schooling of the population.

The Global Competitiveness Report 2011-12 prepared by the World Economic Forum, ranked Chile in the position number 31 in the world and as the most competitive country in Latin America (above Brazil, Mexico and Uruguay), due to solid institutional framework, competitive markets and efficient financial market.

Moreover, Chile is 39th in the world ranking “Ease of Doing Business” elaborated by the World Bank, the best placed country in the continent with a good performance on the indicators of ease of starting business and investor protection. It is also the best performing country in the Corruption Perception Index, ranking 21th of the world.

Chile: Main macroeconomic variables