Chile’s Economy Slows Down Despite Strong Copper Output

Chile’s economy is facing a mixed outlook. The Central Bank reported that in May 2025, the country’s main economic activity index rose 3.2% compared to the same month last year.

However, when compared to April, the economy actually shrank by 0.2%. This means that, while things look better than last year, the economy is not growing as fast as experts hoped.

Copper mining is the bright spot. In May, Chile produced 486,574 metric tons of copper, which is the highest monthly figure for the year and a 9.4% increase from last year. Copper is very important for Chile’s economy.

The state-owned company Codelco produced about a third of the country’s copper in May. But Codelco is struggling with high debt—over $20 billion—and its mines are getting older and more expensive to operate.

This puts pressure on both the company and the government, since Codelco gives a big share of its profits to public finances. Other parts of the economy are not doing as well. Services, retail, and industry all saw small declines in May.

Unemployment is still high at 8.9%, and it is even higher for women, at 9.5%. Inflation is also a problem. Prices rose 4.44% in May, which is above the Central Bank’s target.

Because of this, the bank has kept its main interest rate at 5.0%. It may lower this rate if inflation falls, to help businesses and families borrow and spend more easily.

Chile’s Economy Faces Modest Growth Amid Election Uncertainty

Looking ahead, the Organization for Economic Cooperation and Development (OECD) expects Chile’s economy to grow by about 2.4% in 2025. This is a modest pace, and there are still risks.

High unemployment, weak job creation outside of mining, and uncertain global trade all make it hard for the economy to pick up speed. The upcoming presidential election adds more uncertainty.

Some candidates want to privatize parts of Codelco to attract investment, while others want to keep it under state control and reinvest its profits.

What happens in the election could change how Chile manages its most important industry and its place as the world’s top copper supplier. Chile’s situation shows how even countries rich in resources can face tough choices.

The country needs to find ways to make its economy stronger outside of mining and to deal with challenges like unemployment and inflation. The decisions made now will shape Chile’s future and its role in the global market.