Country Economic Forecasts > Chile

The external background remains the major threat to the economy, in particular the ongoing slowdown in China and the weak peso. Chilean activity will be hampered by falling copper prices dampening business confidence and deterring private investment. Meanwhile, lower revenues from the mining sector will necessitate a more restrictive fiscal policy, just as stubbornly high inflation last year has led to a less accommodative monetary policy.However, there is still some good news. The labour market remains quite robust, with the unemployment rate unchanged relative to a year earlier in November, at 6.1%. And as we expect inflation to fall back into the central banks target range in 2016, households should still experience reasonable real wage growth. Overall, we expect GDP growth to average 2.5% this year after an estimated 2.1% in 2015.