CHILE · ECONOMY
Key Facts
- —The country Chile, a long Pacific nation in South America, is the world’s biggest copper miner and a US free-trade partner since 2004.
- —What happened On Tuesday 6 October, the World Bank cut its Chile growth forecast for 2026 to 0.8%, from the 2.4% it projected in April.
- —The rebound The bank now expects growth of 3.0% in 2027, up from 2.3% in April, and 2.3% in 2028.
- —Why it was cut The report blames weaker spending, a softer job market, higher fuel prices, bad weather and lower mining output.
- —The US link Chile supplied 68% of US refined copper imports in 2021 to 2024, according to the US Geological Survey.
- —The central bank Chile’s central bank sees growth of 0.25% to 0.75% this year and 2% to 3% in 2027.
- —Still open Whether Washington adds a duty on refined copper from 2027, the year Chile is meant to recover.
The World Bank on Tuesday cut its Chile growth forecast for 2026 to 0.8%, down from the 2.4% it projected in April. The cut matters beyond Chile, because lower mining output is one reason and Chile supplies most of the refined copper the United States imports.
The bank still expects a rebound to 3.0% in 2027, above the 2.3% it pencilled in six months ago. The figures come from its twice-yearly Latin America and the Caribbean Economic Update, which puts growth for the whole region at 2.2% this year.
What the World Bank Report Says
The World Bank is a Washington-based development lender owned by its member governments. Its October 2026 regional report, published on Tuesday 6 October, uses data up to 23 September.
The report’s Chile growth forecast shows 0.8% for 2026, 3.0% for 2027 and 2.3% for 2028, after 2.5% in 2025. This year would be Chile’s weakest since 2023, when the economy grew 0.7%.
The Chile growth forecast fell in two steps. The bank’s June global outlook had already trimmed 2026 to 2.1%, before the new report cut it to 0.8%.
Among the six big economies the bank groups together, Chile now has the weakest 2026 forecast. Argentina and Brazil stand at 2.1%, Colombia at 2.3%, Mexico at 1.4% and Peru at 3.2%.
The picture flips in 2027. Chile’s 3.0% would put it level with Argentina and Peru at the top of that group, ahead of Colombia, Mexico and Brazil.
Why Chile Slowed in 2026
The report says economic activity in Chile “has weakened in 2026”, with domestic demand slowing amid “deteriorating labor market conditions and weaker confidence”. In plain terms, households and companies are spending less while the job market worsens.
Higher fuel prices “have further weighed on household and business incomes”, the bank adds. Chile cushions fuel price swings through MEPCO, a mechanism that adjusts variable fuel taxes, the report notes.
Two supply problems made it worse. The report cites “adverse weather affecting several sectors” and “lower mining output”.
Chile’s central bank gave much the same reasons in September. It cited slowing demand, adverse weather in several sectors and lower mining production.
The Copper and Tariff Link to the US
Chile mined about 5.3 million tonnes of copper in 2025, close to a quarter of world output, according to the US Geological Survey. The agency says Chile supplied 68% of US refined copper imports between 2021 and 2024.
Trade runs both ways. US goods trade with Chile reached about US$38.1 billion in 2025, including US$19.1 billion of US exports, the Office of the US Trade Representative says.
A 50% US tariff on semi-finished copper products and copper-heavy goods took effect on 1 August 2025. It rests on Proclamation 10962, which President Donald Trump signed on 30 July 2025.
Since 6 April 2026, Proclamation 11021 has charged that duty on the full value of the goods. Some copper items now pay a lower 25% rate.
Refined copper, the category where Chile dominates US imports, was left for later. Proclamation 10962 gave the Commerce Department until 30 June 2026 to report on US copper markets, including refined copper.
The president would then decide whether a phased duty of 15% from 2027 and 30% from 2028 is warranted. High prices soften the blow, with copper above US$6.5 a pound, Chile’s central bank said on 8 September.
How Chile’s Central Bank Sees It
The Banco Central de Chile, the country’s independent central bank, publishes its own Chile growth forecast, and it is slightly more pessimistic. Its September Monetary Policy Report cut the 2026 range to 0.25% to 0.75%, from 1.0% to 1.75% in June.
That September cut left the central bank’s range below the World Bank’s new figure. For 2027, it expects 2% to 3%, so the World Bank’s 3.0% sits at the top of that range.
For 2028, the central bank sees growth of 2.25% to 3.25%. The World Bank is more cautious for that year, at 2.3%.
The central bank held its policy rate at 4.5% in a unanimous vote on 8 September. Annual inflation rose to 4.1% in August, and the bank expects it back near 3% only in the second quarter of 2027.
Borrowing costs abroad are rising too. The World Bank notes that the US Federal Reserve raised its target range to 3.75% to 4.00% in September, its first increase since July 2023.
What It Means for You
For US investors, the new Chile growth forecast describes a weak home market, not a collapse. The World Bank still expects Chile to grow faster than Brazil, Colombia and Mexico next year.
For US exporters, slower spending in Chile could weigh on sales in a market that bought US$19.1 billion of US goods in 2025. For copper buyers, the figure to watch is Chilean mine output, one of the reasons the bank gave for the cut.
For anyone holding Chilean assets, the next test is the central bank meeting on 26 and 27 October. Its September statement said the conflict between the United States and Iran remained the main focus abroad.
What Is Not Known
Whether Washington adds the refined-copper duty from January 2027 remains open. That is the same year the World Bank expects Chile’s rebound.
The weather is the other unknown. The report says a powerful El Niño, a Pacific warming that shifts rainfall, will likely peak in late 2026 and could disrupt production.
The bank calls the risks to its regional outlook “tilted to the downside”. Unlike the central bank, it gives its Chile growth forecast as a single number rather than a range.
More: Chile news in English, every day from The Rio Times.
Frequently Asked Questions
What is the World Bank’s new Chile growth forecast?
The new Chile growth forecast puts 2026 growth at 0.8%, down from 2.4% in the World Bank’s April report. The bank sees growth of 3.0% in 2027 and 2.3% in 2028.
Why did the World Bank cut Chile’s forecast?
The report points to weaker household and business spending, a worsening job market and lower confidence. Higher fuel prices, bad weather and lower mining output added to the slowdown.
Why does Chile’s economy matter to the United States?
Chile is the world’s largest copper miner and supplied 68% of US refined copper imports in 2021 to 2024, the US Geological Survey says. The two countries have had a free-trade agreement since 2004.
How does the World Bank forecast compare with Chile’s central bank?
Chile’s central bank expects 0.25% to 0.75% growth in 2026 and 2% to 3% in 2027. The World Bank’s 0.8% is just above that range for this year, and its 3.0% sits at the top for next year.
Sources: World Bank: Latin America and the Caribbean Economic Update, October 2026, 6 October 2026; World Bank press release: Latin America and the Caribbean Holds Steady While Top Performers Show a Path to Higher Growth, 6 October 2026; World Bank: Latin America and the Caribbean Economic Update, April 2026, 8 April 2026; World Bank: Global Economic Prospects, Latin America and the Caribbean, June 2026, June 2026; Banco Central de Chile: IPoM September 2026 summary, September 2026; Banco Central de Chile: monetary policy statement, September 2026, 8 September 2026; Federal Reserve: FOMC statement, 16 September 2026; Federal Register: Proclamation 10962, Adjusting Imports of Copper Into the United States, 5 August 2025; Federal Register: Proclamation 11021, Strengthening Actions Taken To Adjust Imports of Aluminum, Steel, and Copper, 9 April 2026; US Geological Survey: Mineral Commodity Summaries 2026, Copper, 2026; Office of the US Trade Representative: Chile, accessed 6 October 2026; Diario Financiero: Banco Mundial se sube a ola de recortes de PIB para Chile este año, 6 October 2026.
This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error · Editorial responsibility: Matthias Camenzind, Editor-in-Chief