Chile positions itself as the region’s safest investment country 

“Chile again looks like a good house in a bad neighborhood”.

With this sentence, Bloomberg highlighted that Chile has begun to re-position itself as the safest country in the region for investment.

Specifically, the country’s risk has reached the lowest level in the last eight months; this risk is lower than that of Peru – which has been affected by a series of social and political protests – and Panama, for example, due to conflicts related to mining.

According to the publication, the rejection of the new constitution influenced the favorable investment scenario.

In the second half of last year, Bloomberg highlighted in this context that “the favorite of the Latin American market (Chile) is now riskier than chaotic Peru.”

At the time, it alluded to the fact that Chile was more likely to default in the next five years than its neighbor.

The publication noted that “since mid-December, the spread of credit default swaps with historical regional peers has widened.”

Juan Prada, the strategist at Barclays, noted that “while concerns about Chile have eased, this is not the case for other economies in the region, such as Peru with its ongoing protests and Colombia with Petro.”

The decline in country risk was also influenced by the government achieving its first budget surplus in 2022 after a decade, thanks to higher taxes and mining.

This became clear after the Budget Directorate (Dipres) published details on the execution of the 2022 fiscal budget with the best balance in a decade.

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