Chile Posts 2.5% Growth as Kast Pledges to Double It

Chile’s economy grew 2.5% in 2025, the Central Bank confirmed on Wednesday, beating its own forecast and handing newly inaugurated President José Antonio Kast a stronger starting point than expected — along with a pointed challenge to do better. The Rio Times, the Latin American financial news outlet, reports that the official Cuentas Nacionales data showed domestic demand, rising investment, and consumer spending all contributed to a result that exceeded the preliminary 2.3% estimate published in February.

The figure also revised 2024 growth upward from 2.6% to 2.8%, and 2023 from 0.5% to 0.7%. Despite the upgrades, the broader picture remains sobering: Chile has averaged just 2% annual growth over the past decade, roughly half the pace it sustained during the boom years that made it Latin America’s most developed economy.

What Drove Chile’s Economy in 2025

Investment was the standout performer, surging 8.9% on the year. The Central Bank attributed the jump to purchases of electrical equipment, electronics, and vehicles, while construction contributed at a more modest pace. Household consumption rose 2.7%, with gains across all categories, particularly in health services, restaurants, and technology goods.

Government spending expanded 3.0%, driven largely by healthcare outlays. On the trade side, exports grew 4.6% — led by fruit, gold, and processed food — but imports climbed a sharper 10.5%, producing a net drag on output.

Sectorally, commerce, personal services, manufacturing, and business services made the largest contributions to GDP. Mining — historically Chile’s engine — actually contracted, as did the electricity, gas, and water sector. Real gross national income grew a faster 4.0%, boosted by improved terms of trade as copper prices held above $4.70 per pound.

Boric Exits With a Mixed Legacy

Former President Gabriel Boric, who left office on March 11, highlighted the 2.5% result as vindication of his economic management. His term tamed inflation from above 14% to below 3% and delivered a pension reform and reduced work week. But growth averaged just 2% across his four years — the second-weakest since Chile’s return to democracy in 1990.

Two failed constitutional rewrites, persistent unemployment near 8.5%, and a structural deficit that ballooned to 3.6% of GDP defined the other side of his legacy. By the time Boric departed, more than half of Chileans rated his government the worst since 1990, according to polling firm Cadem.

Kast Sets His Sights on 4% Growth

Kast’s deputy finance minister, Juan Pablo Rodríguez, wasted no time framing the data as a call to action. He described the 2.5% result as confirmation that Chile has been trapped in a decade of mediocre expansion averaging around 2.1%, and said the new administration’s target is annual growth near 4% — a pace Chile has not sustained since the commodity supercycle of the early 2010s.

To get there, Kast plans to cut corporate taxes from 27% to 23%, slash $6 billion from the federal budget within 18 months, and roll back dozens of environmental regulations inherited from the Boric era. Critics warn that austerity of that scale — roughly 1.5% of GDP — could drag growth in the short term, especially with unemployment still elevated and global headwinds from U.S. tariffs and the Iran war clouding the outlook.

Whether Kast can thread the needle between fiscal discipline and faster expansion will define his presidency. Market analysts project 2.5% growth again in 2026, while the IMF is more cautious at 2.0%. For a country that once grew at twice that pace, the 2.5% that closed 2025 is both a floor Kast refuses to accept and a ceiling he has yet to prove he can break through.