Economic Analysis


Population 19.7 million
GDP per capita 16,065 US$
Country risk assessment
Business Climate
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major macro economic indicators

  2020 2021 2022 (e) 2023 (p)
GDP growth (%) -6.0 11.7 2.7 -1.2
Inflation (yearly average, %) 3.0 4.5 11.6 8.7
Budget balance (% GDP) -7.3 -7.6 1.0 -3.0
Current account balance (% GDP) -1.7 -6.6 -7.5 -3.5
Public debt (% GDP) 32.6 36.3 36.0 36.5

(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, fostering social discontent

Risk assessment

Activity to strongly slowdown in 2022

In 2022, activity will strongly decelerate, mainly underpinned by the positive statistical carry-over of the strong economic performance in Q4 2021. Household consumption (61% of GDP) is expected to post a mild contraction, with the positive impact of the three rounds of pension funds withdrawals (15% of GDP) fading. In addition, the sticky high inflation, worsened by the effects of the war in Ukraine on fuel and food prices, has eroded the population’s purchasing power. Accordingly, the central bank will keep its hawkish monetary stance in the wake of the ongoing tightening by the Fed. In fact, the policy rate was increased in steps from a minimum of 0.5% in July 2021 to 9.75% in July 2022. Meanwhile, gross fixed investment (21% of GDP) should shrink, weighed down by the private sector. Actually, investors are likely to remain cautious amid the uncertainty brought by the start of the new government, the ongoing constitution rewriting discussion and the possibility of an increase in royalty taxes for mining companies. Conversely, net exports are expected to bring a positive contribution to activity. Exports should mildly expand, driven by the lithium boom (accounting for 6.8% of all foreign sales in H1 2022, up from 0.8% in H1 2021), while copper sales could contract if moderating international prices - as observed in early H2 2022, in connection with the Chinese slowdown - persist. Mining accounted for 62% of total foreign sales in 2021, with the red metal representing 57% on its own.


Fiscal consolidation, but still a large external deficit

The wide current account shortfall registered in 2021 should ease slightly in 2022. The primary income deficit (5.9% of 2021 GDP) is expected to marginally narrow, as the sharp deceleration in domestic activity will reduce foreign firms’ profit repatriation. In addition, the trade balance surplus (3.4% of GDP in 2021) could somewhat widen, since local demand should lose impetus relatively faster than the global one, tempering imports quicker than exports. Nonetheless, Chile is a net energy importer and this imbalance deteriorated sharply in H1 2022, amid the escalation of energy prices. This represents a downside risk to the trade balance. Regarding the financing of the current account deficit, foreign direct investment (4.9% of GDP in 2021) could weaken somewhat, as the local political uncertainty (namely the constitution rewriting and the possible changes to the business environment) raises foreign investors’ caution. Furthermore, the more volatile portfolio investment net inflows should fill the remaining gap, along with public, non-financial enterprises and banks debt issuance. Furthermore, Chile´s negative net international investment position stood at roughly -11% of GDP in Q1 2022, mainly smoothed by the existence of relevant pension funds’ investments abroad (estimated at 25% of GDP as of March 2022, despite the recent withdrawals). The external debt stood at 76.8% of GDP in Q1 2022, 66% of which owed by the private sector. Overall, the wide current account deficit exposes Chile to changes in global investors’ mood. In early H2 2022, the Chilean Peso fell to a record low  (reaching a depreciation of 23% versus the dollar in the year) amid rising global risk aversion and local conditions, contributing to inflation. To respond, the central bank committed USD 25 billion for intervention (sales on the spot market, hedging instruments and currency swap) in the foreign exchange market. The bank has approximately USD 45.8 billion in foreign exchange reserves (covering over 6 months of imports). Moreover, it holds access since May 2022 (for one renewable year) to a USD 3.5 billion IMF Short-term Liquidity Line. On the fiscal side, the public account shortfall is expected to significantly narrow in 2022 (despite temporary subsidies to smooth the negative impact of high inflation on households´ purchasing power). The significant consolidation will be supported by the phase out of COVID-related stimuli and tax revenues rise propelled by income tax collection, high inflation and exchange rate depreciation.   


Political uncertainty amid the constitution rewriting

President Gabriel Boric, from the left-wing Apruebo Dignidad coalition, was sworn in on 11 March 2022. He was a student leader and his victory represented a shift from the centrist incumbents, who presided over the country since the end of the military dictatorship of Augusto Pinochet in 1990. Mr. Boric describes himself as a moderate socialist and aims to increase social spending (such as the creation of a universal basic pension). In order to finance higher expenditure, in July 2022, the government presented a tax reform package to increase revenues by 4.1% of GDP once fully implemented (gradually from 2023 up to 2026). The proposal majorly encompasses raising taxation on higher-income, increasing mining royalties, and curbing tax exemption and evasion. To be approved, the reforms need to reach a simple majority in Congress. However, the ruling Apruebo Dignidad coalition holds only 37 out of 155 seats in the fragmented Lower House and five out 50 of seats in the Senate (split evenly between the centre-right coalition led by Chile Podemos Mas, several left-wing parties, and independents). Meanwhile, in the national plebiscite held on 4 September 2022, Chileans widely rejected (62% of the voters) the Constitutional Assembly’s draft. The text would have expanded the provision of social transfers by the government (including health and education), reduced the government centralization, and strengthened the environmental role and indigenous rights. Overall, the defeat by a large margin will likely imply the construction of a more moderate text. In fact, after the voting outcome, the government announced cabinet changes and stated its support for drafting a new constitution with support from Congress and other political factions.






Last updated: September 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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