Chile’s Economy Outperforms Expectations with 2.3% Growth in First Quarter 2025

Chile’s central bank reported Monday that the country’s economy grew 2.3% in the first quarter of 2025 compared to the same period last year. The quarterly expansion reached 0.7%, exceeding analysts’ median forecast of 0.5%.

This performance signals continued resilience in the South American nation’s economy despite global trade uncertainties. Trade, manufacturing, personal services, and agricultural activities drove this growth.

The non-mining sector showed particular strength with a 1.2% expansion during the quarter. Meanwhile, mining activity contracted by 3.6%, along with declines in financial services and construction sectors.

Chile’s economic recovery builds on momentum gained throughout 2024, which ended with surprising 6.6% growth in December. The country has maintained steady progress despite challenges from U.S. tariffs on key Chilean exports like fruit and fish.

These trade barriers pose ongoing concerns for the export-dependent economy. The central bank has maintained interest rates at 5% so far this year. This follows significant cuts from a peak of 11.25% in mid-2023.

Analysts expect rates to remain unchanged at the bank’s June meeting, reflecting caution amid inflation risks and global economic uncertainty. Inflation remains a key focus for Chilean policymakers.

Experts project it will exceed 4.5% by mid-2025 before dropping to 3.8% by December. The central bank aims to reach its 3% target by early 2026 as pressures from electricity tariff increases and peso depreciation fade.

Finance Minister Mario Marcel maintains the government’s projection of approximately 2.5% growth for 2025. Market analysts take a more conservative view, forecasting 2% expansion both this year and next.

The OECD similarly projects 2.3% growth for 2025, followed by 2.1% in 2026. Chile’s copper industry continues to shield the economy from some external pressures.

With copper comprising about 30% of GDP, sustained global demand for minerals needed in the green energy transition supports investment and growth prospects.

Economists expect a gradual slowdown in coming quarters as temporary growth drivers diminish. However, leading indicators suggest Chile’s economic activity will remain relatively strong throughout 2025.