Economic Analysis


Population 19.5 million
GDP per capita 12,993 US$
Country risk assessment
Business Climate
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major macro economic indicators

  2019 2020 2021 (e) 2022 (f)
GDP growth (%) 0.9 -5.8 11.2 2.0
Inflation (yearly average, %) 2.3 3.0 4.5 5.3
Budget balance (% GDP) -2.9 -7.3 -7.8 -3.6
Current account balance (% GDP) -3.8 1.4 -4.6 -3.3
Public debt (% GDP) 28.2 32.5 34.4 37.3

(e): Estimate (f): Forecast


  • Mining (leading copper producer), agricultural, fishery and forestry resources
  • Numerous free-trade agreements
  • Flexible monetary, fiscal and exchange rate policies
  • Member of the OECD and the Pacific Alliance
  • Solid institutions


  • Small and open economy vulnerable to external shocks given the dependence on copper and on Chinese demand
  • Exposure to climatic and earthquake risks
  • Inadequate research and innovation
  • Income and wealth disparity, poor education and health systems

Risk assessment

Activity will strongly slowdown in 2022

In 2022, GDP growth will slow strongly, due to a very high base of comparison and as stimuli measures are gradually dismantled. Household consumption (61% of GDP) is expected to post a mild contraction, with the positive impact of the three rounds of pension withdrawals fading (disbursements up to December 2021 totalled USD 47.2 billion or 15% of GDP). It is important to note that after a lengthy discussion, the Congress rejected in Q4 2021 a bill to allow for a fourth round of withdrawals. Furthermore, although the unemployment rate is expected to continue improving towards its pre-crisis level, inflation will still be high and the central bank will keep its hawkish monetary stance. Meanwhile, gross fixed investments (21% of GDP) are also expected to shrink, weighed down by the private side. Actually, investors are likely to remain cautions amid the uncertainty brought by the beginning of a new government, the ongoing constitution rewriting process and the possibility of an increase in royalty taxes for mining companies. Relatively tighter global and domestic credit conditions should also play a negative role. Conversely, net exports are expected to contribute positively to activity. Exports should report a mild expansion, driven by still supportive copper demand (mining accounted for 62% of total foreign sales in 2021, the red metal alone represented 57% of all goods sales). On the other hand, imports are set to fall in line with the softening of domestic demand.


Large twin deficits are expected to evolve positively

The current account registered a broad deterioration in 2021, returning to its usual deficit. The primary income deficit strongly widened, as repatriated foreign investment income rose strongly notably amid high copper prices. In addition, the services deficit also evolved negatively due to higher international freight costs. The trade balance surplus narrowed, despite the bright export expansion. This is because imports registered a relatively swifter growth, thanks to heated domestic demand and high international oil prices. On the financing side, net foreign direct investment improved from the 2020 level, but was not enough to cover the wide external account shortfall. Nonetheless, the more volatile portfolio investments could fill the remaining gap (public, along with non-financial enterprises and banks debt issuance). In 2022, the current account shortfall is expected to narrow as the sharp deceleration in domestic activity will reduce imports and foreign firms’ profit repatriation. Concerning the external debt, it stood at 81.3% of GDP in Q3 2021, 65% of which is owed by the private sector. The negative net international investment position is still at a moderate level, at roughly -5% of GDP in Q3 2021, mainly smoothed by the existence of relevant pension funds’ investments abroad (estimated at 31% of GDP as of September 2021). Moreover, the central bank has approximately USD 53.3 billion in foreign exchange reserves (covering over 8 months of imports).


On the fiscal side, the budget deficit widened further in 2021, despite the elevated copper-related revenues and the strong rebound in tax revenues amid the robust economic resumption. This was explained by larger fiscal stimulus (equivalent to approximately 7.0% of GDP). As a result, the fiscal gap was majorly financed by the drawing from the sovereign wealth fund (the Treasury held USD 9.9 billion in October 2021, down from USD 19 billion in December 2020) and new debt issuing. In 2022, the public account shortfall is expected to narrow, in line with the 2022 budget, which pointed to a real expenditure contraction of 22.5% compared to 2021.


Political uncertainty amid a new government and the constitution rewriting

In the December 2021 presidential elections runoff, Gabriel Boric from the left-wing Apruebo Dignidad coalition defeated the right-wing candidate of the Republican party Jose Antonio Kast (56/44). Mr. Boric will become Chile´s youngest-ever president (35) and will take office on 11 March 2022. He is a former student leader and had been a congressional representative since 2014. His victory represents a shift from the centrist incumbents, who presided the country since the end of the military dictatorship of Augusto Pinochet in 1990. Mr. Boric describes himself as a moderate socialist and is likely to increase social spending (such as the creation of a universal basic pension). In order to finance it, he advocates in favour of increasing taxes by 5% of GDP in four years, including a wealth tax and higher corporate tax. The governmental program also sets as a goal a public debt that does not exceed 45% of GDP by the end of his four-year term. He has also pushed for strengthening labour protection, creating a carbon tax, tougher environmental rules and higher mining royalties. Nonetheless, the lack of majority in Congress waters down the likelihood of passing meaningful policy changes as consensus will have to be sought. The Apruebo Dignidad Coalition holds 37 out of 155 seats in the very fragmented Lower House and five out 50 of seats in the Senate (split evenly between the centre-right coalition led by Chile Podemos Mas and several left-wing parties and independents). Lastly, the final version of the constitution currently drafted by the left leaning Constitutional Convention should be voted on by July 2022, before its submission to a referendum in September 2022.


Last updated: February 2022


Promissory notes, cheques and bills of exchange are frequently used for commercial transactions in Chile. In an event of default, it offers creditors some safeguards, including access to the summary proceeding (Juicio Ejecutivo). Under a juicio ejecutivo, based on his appraisal of the documents submitted, a first instance judge (Juzgado Civil) may order a debtor to pay at the moment of the notification – if the debtor fails to do so, his property will be seized. These documents may need to be validated by court before becoming legally enforceable.

Bills of exchange that are guaranteed by a bank are widely accepted, though somewhat difficult to obtain. They limit the risk of payment default by offering creditor additional recourse to the endorser of the bill.

Cheques, which are used more often than bills of exchange or promissory notes, offer similar legal safeguards under Juicio Ejecutivo in the event of unpaid for a cause (protesto), uncovered cheques, or closed accounts. Checks and the other mentioned documents, if not paid on time, can be reported to a Credit Report Company called Boletin Comercial.

The same is true of the promissory note (pagaré), which − like bills of exchange and cheques – is an instrument enforceable by law and, when unpaid, may also be recorded at Boletín Comercial (see below). The promissory note needs to be validated (protestada) by a public notary or in a judicial trial.

The Boletín Comercial is a company dedicated to conducting financial risk analysis. It provides to other information companies (such as Dicom, SIISA) information about the debts registered at national level for all kind of debtors. Boletín Comercial is the official and most important company, on this matter, at national level under the authority of the Santiago Chamber of Commerce (Cámara de Comercio de Santiago). Both, Companies and individuals, can be registered as debtors in the Boletin Comercial. The register provides key financial information that can be consulted by anyone who is interested in obtaining a picture of the financial behaviour of a Company or individual.

Electronic transfers via the SWIFT network, widely used by Chilean banks, are a quick, fairly reliable, and cheap instrument.

Debt Collection

Amicable phase

Collection begins with an amicable collection process where parties can agree on a payment settlement or other payment plan. The length of this amicable phase depends on the predefined term of the documents supporting the debt (cheque, invoice, promissory note, bill of exchange). A formal notice is sent by a recorded delivery letter inviting the debtor to pay.

If the parties did not include any specific clauses in the commercial contract, the applicable rate for delays on the payment is the conventional interest rate as defined by the central bank of Chile on a periodical basis.


Ordinary proceedings

When a settlement agreement cannot be reached with the debtor, the creditor will initiate a legal collection process ruled by local civil procedure.

Aside from the Juicio Ejecutivo creditors who are unable to settle with their debtors out of court may enforce their right to payment through the corresponding legal action ruled by the civil procedure. According to the local procedural laws, there are two kinds of judicial collection procedures; i), ordinary proceedings (Juicio Ordinario); ii) and abbreviated proceeding (Juicio Sumario) depending on the value of the sued amount and the type of documents that support the debt.

The claimant needs to explain the basis for their legal action and enclose all supporting documents (original copies) and evidence. After the first presentation in court, the judge will decide whether the legal action has basis or not. If the judge considers there are enough arguments and evidence, he will give course to the process.

All judicial action needs the presence of a barrister or solicitor (lawyer), whether taking place in front of a minor court (Juzgados – primera instancia) or superior court (Corte Apelaciones o Suprema − segunda instancia).

Debtors can dispute ruling with motivated arguments that law contains at the Código de Procedimiento Civil (Civil Procedure Code, defences) such as payment of debt, prescription, compensation, etc. Judges will consider these arguments and will accept or reject the defence. It is important to note that, while the defences of the debtor are discussed by the parties in the trial, the steps relating to seizure of assets are not stayed. The idea of this is that the debtor cannot delay the procedure unnecessarily.

Trials can last from six months up to two years, depending on the document, the debtor’s defence, and if an appeal is filed following the initial judgement.

Enforcement of a Legal Decision

Domestic judgments are enforceable when all appeals have been exhausted. If the debtor fails to comply with the decision, the court can order an auction of the debtor’s assets. Collection from a third party owing to the debtor is not possible.

Foreign judgments may be enforced if the Supreme Court validates these through an exequatur proceeding. Chilean law only recognises foreign judgements on a reciprocity basis: the issuing country must have an agreement with Chile regarding recognition and enforcement of legal decisions. Proceedings can last from between one to two years and the amounts to recover decrease because it is not possible to request the restitution of taxes paid to the treasury, which national companies can require.

Insolvency Proceedings

Out-of court proceedings
Extra-judicial reorganization

The 2014 bankruptcy law recognizes agreements between creditors and debtors that are reached outside of a bankruptcy proceeding, whereby a court approves the agreement that was developed outside of the bankruptcy court. In order to be approved, two or more creditors whose claims represent at least 75% of the total claims corresponding to their respective group must accept the plan.

Chilean law distinguishes different categories of creditors during a bankruptcy process, e.g. employees owned money, creditors that have a mortgage (usually banks), etc. Creditors in these categories have preference for payment over others. If creditors do not meet the criteria to be part of these categories, they do not receive have any kind of preference for payment.

While considering the approval of said plan, the court stays the procedure and the legal actions against the debtor. However, during this time also, the debtor is prohibited from disposing of any of its assets. After approval, the plan has the same effect as a judicial reorganization.


Restructuring proceedings

Restructuring processes carried out without a formal bankruptcy process are also carried out through a court trial at the request of the creditor(s). In the event that the debtor is not able to reorganize his debt through any agreement or negotiation, creditors may request the liquidation of the company.


Judicial reorganization

These agreements are more formal than extra-judicial agreements, and can only be filed by debtors, as they have to declare their insolvency to the court. The proceedings apply to both secured and unsecured creditors. Once debtors enter the judicial reorganization process, they must subsequently propose a reorganization plan, which requires the approval of at least two thirds of the total number of creditors.



Liquidation is organized through a single procedure initiated upon demand of the debtor or creditors. The latter can file for bankruptcy when a debtor defaults without appointing an administrator for its business. Once bankruptcy is declared, a trustee is given responsibility for the debtors’ business and assets.

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