Chile Boosts 2024 Growth Forecast to 2.7%

The Chilean government raised its economic growth forecast for 2024 to 2.7%, up from 2.5%.

This optimistic projection comes from the Ministry of Finance’s first-quarter Public Finance Report. The report was presented to the Senate.

Several factors contribute to this revised outlook. The Ministry of Finance attributes the increase to accumulated momentum since mid-2023 and a strong first quarter in 2024.

Key drivers include reduced interest rates, a recovery in consumer spending, and dynamic export activities.

Finance Minister Mario Marcel and Budget Director Javiera Martínez Fariña highlighted these updates during a Senate Finance Committee session.

Marcel emphasized that Chile has overcome years of fiscal uncertainty. The improved macroeconomic scenario for 2024 builds on stronger fiscal foundations.

He noted that the anticipated rise in copper prices, Chile’s primary export, will further ease fiscal pressures.

Copper’s expected price increase provides a critical buffer for the country’s finances.

The government report noted that Chile’s economy grew by 0.2% in 2023, surpassing expectations of a potential contraction.

The economy also saw a 0.4% year-on-year growth in the fourth quarter of 2023.

This growth was driven by sectors such as electricity, gas, water supply, waste management, personal services, and transportation.

However, challenges remain, particularly in household consumption and investment, which saw declines.

President Gabriel Boric and Minister Marcel expressed confidence in sustained economic recovery throughout 2024.

They refuted pessimistic forecasts, highlighting government achievements like minimum wage increases, the Copago Cero healthcare initiative, and a 40-hour workweek.

Chile Boosts 2024 Growth Forecast to 2.7%

The Chilean economy also saw improvements in external trade. Although both exports and imports declined, the net effect on GDP was positive.

Exports fell by 0.3%, driven by lower shipments of copper and wood products. Imports dropped by 12%, particularly in vehicles and fuels.

Chile’s revised growth forecast reflects robust first-quarter performance, favorable external conditions, and effective fiscal policies.

The government remains focused on consolidating these gains, addressing remaining challenges, and ensuring sustainable growth in the coming years.