Chile: Proposal for an Arrangement Under the Short-Term Liquidity Line-Press Release; Staff Report; and Statement by the Executive Director for Chile

International Monetary Fund. Western Hemisphere Dept.

doi:10.5089/9798400211027.002.A001

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International Monetary Fund. Western Hemisphere Dept.

International Monetary Fund. Western Hemisphere Dept.
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Publication Date:: 24 May 2022

eISBN:: 9798400211027

ISBN:: 9798400211027

Language:: English

Keywords:: IMF staff calculation; fcl arrangement; central bank of Chile; fund quota; return on equity; COVID-19; Global

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1. Chile maintains very strong economic fundamentals and institutional policy frameworks, with a sustained track record of implementing very strong policies. Monetary policy is anchored in a highly credible inflation-targeting framework, accompanied by a free-floating exchange rate regime. The financial system is resilient and functions well within a sound regulatory framework. Fiscal policy has been guided by a structural fiscal balance rule since 2001, which allowed Chile to build ample fiscal space during commodity price booms. Chile has remained resilient even on the face of very large shocks, such as the 2019 social unrest and the Covid-19 pandemic. After taking office in March, President Boric’s administration is embarking on a far-reaching reform agenda to tackle inequality, improve social services, and foster a green economy, while committing to preserving macroeconomic stability and fiscal sustainability.

Abstract

Context

1. Chile maintains very strong economic fundamentals and institutional policy frameworks, with a sustained track record of implementing very strong policies. Monetary policy is anchored in a highly credible inflation-targeting framework, accompanied by a free-floating exchange rate regime. The financial system is resilient and functions well within a sound regulatory framework. Fiscal policy has been guided by a structural fiscal balance rule since 2001, which allowed Chile to build ample fiscal space during commodity price booms. Chile has remained resilient even on the face of very large shocks, such as the 2019 social unrest and the Covid-19 pandemic. After taking office in March, President Boric’s administration is embarking on a far-reaching reform agenda to tackle inequality, improve social services, and foster a green economy, while committing to preserving macroeconomic stability and fiscal sustainability.

2. An SLL arrangement would complement the authorities’ strategy to exit the FCL and support external resilience. The 2020 FCL arrangement served the country well by providing an important buffer against tail risks. Since its approval, the authorities were explicit in their intention to treat the arrangement as precautionary and exit after two years, conditional on economic and financial developments. The economic recovery is firmly established, and risks and uncertainty, while still elevated, have diminished since the onset of the pandemic. Moreover, the authorities have built adequate reserve buffers and secured access to FX liquidity lines. An SLL arrangement would complement the authorities’ plans to exit the FCL and support external resilience by providing predictable liquidity support to address potential, moderate, short-term balance of payment needs stemming from pressures on the capital account.

3. Staff conducted a fact-finding mission in March to assess qualification. The most recent Article IV consultation was concluded in April 2021, when the Executive Board provided a very positive assessment of Chile’s policies.^¹ The 2022 Article IV is tentatively planned for the fall, following the conclusion of the constitutional reform process.

Recent Developments

4. Chile implemented an impressive Covid-19 vaccination campaign, helping limit the health toll from the pandemic. As of end-March, 91 percent of the population had received two doses of the Covid-19 vaccine, and 77 percent of the population had received a booster shot (with a second booster available for the elderly since February). Covid-19 cases peaked in mid-February with the emergence of the Omicron variant, but have fallen quickly since then, while the use of ICU beds remains well below past peaks. Compared with mid-2021, when the country was in strict lockdown, mobility restrictions have significantly eased.

5. The economic recovery is firmly established. Following a decline of 6.1 percent in 2020, GDP rebounded by 11.7 percent in 2021, buoyed by a large, effective, and well-coordinated policy response (Box 1), widespread vaccination, and high copper prices. Economic activity surpassed the pre-pandemic and pre-social unrest levels by mid-2021, and staff estimates that the output gap moved into positive territory in 2021. The recovery in the labor market is proceeding but at a slower pace, with employment about4 percent below its pre-pandemic level in February.

6. The current account deficit widened alongside the sizable pandemic response. The current account deficit widened from 1.9 percent of GDP in 2020 to 6.7 percent in 2021.^²The large 2021 current account deficit reflected the surge in the consumption of imported durable goods following the Covid-19 stimulus measures, in particular the exceptional pension fund withdrawals and large fiscal transfers. The continued fall in tourism revenues due to travel restrictions contributed as well. The income balance also worsened in recent years on the back of large repatriation of dividends from mining companies amid high copper prices.

7. Chile’s financial sector remained resilient amid domestic uncertainty. In line with trends in other emerging market economies (EMs), non-resident portfolio outflows were substantial at the onset of the Covid-19 shock, exceeding those during past episodes of stress. However, flows have swiftly recovered since mid-2020. Compared to other EMs and LA5 countries,^³ Chile experienced a larger increase in longer-term yields in peso-denominated sovereign bonds during 2021, linked to domestic uncertainty. With the conclusion of the elections at end-2021, uncertainty subsided, the stock market recovered, spreads compressed, and long-term yields declined. In recent months, the peso yield curve has inverted, as markets expect lower policy rates once inflation returns to target.

^{Box 1.}

Stimulus Measures in Response to COVID-19

To mitigate the fallout from the pandemic, the authorities deployed a broad set of fiscal, monetary, and financial stimulus measures.^¹ The measures helped to safeguard health, protected incomes and jobs, and supported credit to the economy. They demonstrated strong coordination between the Chilean Ministry of Finance (MoF), the Central Bank of Chile (BCCh), and the Financial Market Regulator (CMF). In addition, congress approved three rounds of pension withdrawals, for a cumulative of about 20 percent of 2020 GDP, which boosted consumption and supported the recovery. However, pension withdrawals were poorly targeted and weakened the pension system.

The MoF implemented a multi-year fiscal package of about 18 percent of GDP, including 7.9 percent of GDP in transfers to the most vulnerable.
The BCCh cut the policy rate to 0.5 percent in March 2020, conducted unconventional monetary policy via asset purchases, and expanded its liquidity facilities.
The CMF implemented policies to facilitate the flow of credit to businesses and households and the issuance and placement of securities.

These measures were temporary, and the authorities are successfully removing them in light of the strong recovery, while continuing to target support to the most vulnerable.

Chile: Fiscal Measures in Response to COVID-19

(In percent of GDP)

Source: Ministry of Finance and IMF staff calculations.

Chile: Fiscal Measures in Response to COVID-19

(In percent of GDP)

			2020	2021	2022
Total size of the stimulus package			4.4	11.5	2.2
1. On budget			3.7	9.9	1.9
	Revenue		1.2	0.0	0.7
	Spending		2.5	9.9	1.2
		of which: transfers to most vulnerable (IFE)	1.3	6.6	0.0
2. Off budget			0.7	1.6	0.3

Source: Ministry of Finance and IMF staff calculations.

Chile: Fiscal Measures in Response to COVID-19

(In percent of GDP)

			2020	2021	2022
Total size of the stimulus package			4.4	11.5	2.2
1. On budget			3.7	9.9	1.9
	Revenue		1.2	0.0	0.7
	Spending		2.5	9.9	1.2
		of which: transfers to most vulnerable (IFE)	1.3	6.6	0.0
2. Off budget			0.7	1.6	0.3

Source: Ministry of Finance and IMF staff calculations.

^¹ For further details, see Chile-2021 Article IV Consultation-IMF Country Report 21/83.

8. The free-floating exchange rate continued to play its role as a shock absorber. The BCCh has allowed the exchange rate to adjust without discretionary intervention since 2002, except for temporary and small FX interventions during the 2019 social unrest (US$2.5 billion in the spot market and US$4.5 billion in the forwards market) to prevent disorderly market conditions. The NEER appreciated by 12 percent from the onset of the pandemic until 2021Q1, but the trend reversed by end-2021. In early 2022, the NEER appreciated again as uncertainty declined after the elections.

Policies, Outlook, and Risks

9. In response to inflationary pressures, the BCCh appropriately tightened monetary policy consistent with the firmly established inflation targeting framework. Buoyant domestic demand, pandemic-related supply constraints and currency depreciation, resulted in the build-up of significant inflationary pressures. Headline (core) inflation reached 9.4 (7.4) percent in March. Two-year ahead inflation expectations edged up to 3.7 percent, but inflation expectations over longer horizons remain firmly anchored at the 3 percent target. Since the start of the war in Ukraine, the rise in global food and fuel prices are adding to prevailing inflationary pressures. The BCCh was a first mover globally in the tightening cycle, quickly raising the policy rate from a low of 0.5 percent in July 2021 to 7 percent in March (substantially above the estimated neutral rate of 3.5 percent).^⁴ The BCCh has communicated its intention to continue tightening as needed to ensure inflation returns to the 3 percent target. In line with its long-standing policy, the BCCh remains committed to a free-floating exchange rate, resorting to intervention only to prevent disorderly market conditions.

10. The BCCh built adequate international reserve buffers, complemented with FX liquidity lines. In January 2021, the BCCh announced a program to gradually accumulate US$12 billion over 15 months. In October 2021, the program was suspended in light of financial market developments and the level of reserves already achieved, which was deemed sufficient by the BCCh. Cumulative purchases totaled US$7.4 billion, while the SDR general allocation further boosted reserves by about US$1.8 billion.^⁵ Reserves stood at US$48.3 billion in March. A bilateral swap facility with the PBOC (US$7.9 billion) and a liquidity line with FLAR (US$1.25 billion) complement reserve buffers.^⁶ The BCCH is also a subscriber of the FED’s FIMA repo facility, which allows the temporary exchange of U.S. Treasury securities held with the FED for U.S. dollars.^⁷

11. The authorities are closely monitoring financial sector vulnerabilities, while further strengthening the already sound regulatory framework. Banks’ capital adequacy ratio stood at 14.9 percent at end-2021, above the regulatory minimum, and non-performing loan(NPL) ratios were low at 1.3 percent in February.^⁸ Stress tests by the CMF show that provisions would be sufficient to cover potential losses, including fromCovid-19 related government-guaranteed loans (FOGAPE). Banks’ return on equity recovered to 20.4 percent at end-2021, and credit growth has also picked up. The restructuring of CMF, which put the supervision of insurance, securities, and banks under the same umbrella, has further strengthened financial sector supervision. In addition, the implementation of Basel III standards that began in December 2021 will improve banks’ capital buffers and enhance financial sector resilience.

12. Following a sizable Covid-19 response, the government is embarking on needed structural fiscal consolidation guided by the fiscal rule. The new government has committed to upholding the fiscal consolidation in the 2022 budget, which targets a reduction in the structural fiscal deficit to 3.9 percent of GDP in 2022 (from 11.4 percent in 2021), underpinned by the expiration of the Covid-19 stimulus measures. Within the budget envelope, the authorities are continuing to target support to the most vulnerable (Box 2). Gross debt reached 36.3 percent of GDP by end-2021, which remains low by international standards. Medium-term fiscal consolidation plans, guided by the fiscal rule, will gradually reduce the structural deficit to below 1 percent of GDP and stabilize gross public debt below45 percent of GDP, while replenishing the sovereign wealth fund.^⁹

13. The new administration envisions far-reaching reforms to improve the lives of Chileans within a sustainable macroeconomic framework. The new government aspires to improve social services, tackle inequality, and transition to a green economy. A forthcoming ambitious tax reform, centered on streamlining exemptions; fostering compliance; and raising mining royalties, the carbon tax, and the progressivity of direct personal taxation (including through a new wealth tax); aims to mobilize permanent revenues to finance social spending needs.^¹⁰ Reforms of social protection systems would complement the recent approval of a universal basic pension, enhance the role of public service provision, and improve quality and access. Advancing the climate agenda, deepening capital markets, and boosting productivity are also key priorities.

^{Box 2.}

2022 Inclusive Recovery Plan

The government’s Inclusive Recovery Plan targets support to the most vulnerable within the 2022 budget envelope. The 2022 budget returns real spending to its pre-pandemic level. The Plan allocates about 1.3 percent of GDP of reserve funds already included in the budget. The funds are roughly equally split among three main areas:^¹

Employment sectors of the economy still affected by the pandemic. The Plan extends employment subsidies for formal employment introduced during the pandemic (IFE Laboral) until September and increases access to childcare and subsidies for working mothers with small children. It also includes measures to support tourism, culture, and entertainment sectors, whose recovery is lagging.
Households affected by high energy prices and new lockdowns. The Plan aims to mitigate the impact of high energy prices on households, including by smoothing energy price increases for fuel and gas (through the MEPCO mechanism) and freezing public transport tariffs for the rest of the year. The Plan also increases the aid for students and the coverage of centers for the elderly, and intends to institutionalize the activation of universal cash transfers (IFE) in case of new lockdowns.
Medium and small-sized enterprises (SMEs). The Plan considers temporary subsidies for SMEs to alleviate the impact of the planned increase of 14.3 percent in the minimum wage, and measures to flow of credit through FOGAPE, the economic development agency (CORFO),and the startup accelerator (SERCOTEC).

^¹ Some measures require legislative changes.

14. With the necessary removal of macroeconomic stimulus, growth is expected to decelerate in 2022 and over the medium term. GDP growth is projected to decline to 1.5 percent in 2022 and 0.5 percent in 2023 —closing the output gap from above— and then converge to its potential rate of 2.5 percent over the medium term. The labor market is envisaged to continue healing, with employment reaching its pre-pandemic level in the near term. Inflation is expected to peak by mid-2022 and converge to target in 2024. The current account deficit is projected to narrow with the unwinding of the extraordinary stimulus and the softening of domestic demand, returning to values consistent with its historical average by the end of the forecast period.

15. Risks and uncertainty have declined since the onset of the pandemic but remain elevated. External risks relate to a possible escalation of sanctions and ensuing deglobalization resulting from the war in Ukraine. While Chile would benefit from high copper prices, rising global food and energy prices, or further supply chain disruptions would add to inflationary pressures. Risks also stem from the possible de-anchoring of inflation expectations in advanced economies leading to an abrupt tightening of global financial conditions, sell offs of risky assets, and capital outflows; or the possible appearance of more lethal and highly contagious Covid-19 variants, which could result in subpar and volatile growth. Domestic risks include social discontent over high food and energy prices, the pace and content of reforms, or the still uncertain outcome of the ongoing constitutional reform (Box 3).

^{Box 3.}

Constitutional Reform Process

Following the social unrest of October 2019, Chile embarked on a constitutional reform to address social demands. A referendum to reform the constitution was approved in October 2020, and members of the Constitutional Convention were elected in May 2021. Deliberations began in July 2021.

The Constitutional Convention is due to present a new draft constitution by July. Commissions are currently voting on individual proposals to be submitted to the plenary, where reforms will need to be approved by a 2/3 majority, followed by a comprehensive process of harmonization.

The new constitution will need approval by a single-majority national referendum in September. Voting will be mandatory. It is expected that new constitution will require follow -up legislative changes that will unfold over time, without any abrupt disruption to Chile’s policy frameworks.

Qualification

16. In staff’s assessment, Chile meets the qualification criteria for an SLL. The external position is sustainable, the sovereign has access to international markets at favorable rates, and official reserves are adequate. The BCCh remains highly credible and, since July 2021, has embarked in a rapid tightening cycle to ensure the convergence of inflation to target. As evidenced by the 2021 FSAP, the financial sector functions well overall, banks are sufficiently capitalized, and the regulatory framework is sound. Public debt is sustainable and anchored by a strong fiscal framework guided by a structural fiscal balance rule.

17. Sustainable external position. In the 2021 Article IV Consultation, Chile’s external position was assessed as moderately stronger than implied by medium-term fundamentals and desirable policies.^¹¹ Staff continues to assess the external position as sustainable. The 2021 current account deficit increased mainly due to the transitory Covid-19 stimulus measures but is projected to decline to its historical average with the ongoing tightening of macroeconomic policies. Moreover, Chile’s net international investment position compares favorably to most EMs and improved considerably from -12 percent of GDP in 2020 to -4.9 percent of GDP in 2021. ^¹² External debt decreased to 72 percent of GDP in 2021 and is robust to standard shocks (Annex 1). On average, the real effective exchange rate appreciated by about 3 percent in 2021. However, these masks a sharp depreciation of about 12 percent since April 2021 until end-2021, driven by domestic uncertainty.

18. Capital account position dominated by private flows. Capital flows to Chile are predominantly private and nearly 90 percent of Chile’s external debt is owed to private creditors. Private flows continue to account for the bulk of total (FDI, portfolio, and other) flows (74 percent of asset flows and 89 percent of liability flows on average over the last three years).^¹³ The absolute value of general government plus central bank liability flows reached 36 percent of the total in 2021, which is unusually hig h but explained b y the large repatriation of foreign assets to meet pandemic-related needs. ^¹⁴

19. Track record of steady sovereign access to international capital markets at favorable terms. Chile has enjoyed uninterrupted access to international capital markets for several decades. It maintains investment grade status according to the three major rating agencies and is consistently among the highest-rated EMs. ^¹⁵ Sovereign bond spreads remained relatively stable over the past 18 months, after correcting from a sharp deterioration at the onset of the pandemic, and are consistently below those from other EMs (EMBIG and five-year CDS spreads stood at 157 and 70 bps at end-March, respectively). The central government issued external debt in each of the past five years, with a cumulative amount equivalent to about 1,500 percent of Chile’s Fund quota (well above the 50 percent of quota requirement).

20. Relatively comfortable international reserve position. Gross international reserves are adequate, at about 91 percent of the Fund’s reserve adequacy metric (ARA) at end-2021. Although somewhat below the recommended 100 percent ARA metric, staff assesses reserves are adequate due to several mitigating factors. First, in mature market economies, ^¹⁶ reserves act mainly as a second line of defense against potential FX funding needs of the financial sector, and Chile’s reserves amply cover estimated potential short-term banks’ needs.^¹⁷ Second, if counted as reserves, the central government’s usable liquid external assets (about US$20 billion in February, including US$6.4 billion in the sovereign wealth fund), would correspond to approximately 28 percent of the ARA metric. Third, standard benchmarks show that Chile compares favorably to other commodity-intensive mature market economies. ^¹⁸ Fourth, the authorities are strongly committed to the free-floating exchange rate regime, further reducing the need for reserves. Finally, reserves are complemented with several FX liquidity lines, as described in paragraph 10.

21. Sustainable public debt position and sound public finances. The authorities remain firmly committed to debt sustainability and fiscal responsibility. Gradual fiscal consolidation guided by the fiscal rule is expected to rebuild buffers and stabilize gross public debt below 45 percent of GDP, which is low by international standards. Public debt is mostly denominated in domestic currency, with an average maturity above ten years. Liquidity risks are mitigated by the sovereign wealth fund and the large domestic banking sector, with abundant room to absorb sovereign issuances in case of an abrupt tightening of global financial conditions. Staff assesses Chile’s public debt to be sustainable with high probability, and a public debt sustainability analysis shows the debt trajectory is robust to standard shocks (Annex 2). The government’s intent to introduce a debt anchor and provide more predictability to medium-term fiscal paths will further enhance the strong fiscal framework. The 2021 Fiscal Transparency Evaluation concluded that Chile has strong fiscal institutions and sound fiscal transparency practices. ^¹⁹

22. Low and stable inflation in the context of a sound monetary and exchange rate policy framework. Chile maintains a highly credible inflation-targeting regime with a free-floating exchange rate system. In the past five years, monthly (y/y) inflation averaged 3 percent. Medium-term inflation expectations have remained anchored over the past decade, reflecting a well-functioning framework with adequate policy guidance. In response to the recent spike in inflation, the BCCh demonstrated resolve to quickly tighten monetary policy and tackle inflationary pressures. The BCCh maintains a small negative equity, which does not compromise policy solvency nor require immediate recapitalization. The 2021 Transparency Review underscored BCCh’s high standards of policy analysis, conduct, and independence.^²⁰

23. Sound financial system and the absence of solvency problems that may threaten systemic stability. The solvency stress tests from the 2021 FSAP concluded that the banking sector is sufficiently capitalized, a nd solvency risks are low. Although a few individual banks would fall below the requirement under the adverse scenario, the implementation Basel III will strengthen banks’ capital positions. The banking system appears resilient to both sizeable funding risks and climate-related risks. Systemic risk arising from non-financial sector external debt is low. Stress tests in fixed income mutual funds suggest the need for enhancing liquidity management practices, while pension funds are equipped with sound liquidity management.

24. Effective financial sector supervision. The 2021 FSAP assessed the banking supervisory framework as robust and the CMF to be capably staffed with expertise in monitoring individual risks. In parallel, a regional peer assessment against the Financial Action Task Force (FATF) anti-money laundering/combating the financing of terrorism (AML/CFT) standard by GAFILAT (FATF La tin America’s regional body) highlighted strengths and considerable progress in the implementation of AMT/CFT prevention systems.

25. Data transparency and integrity. Since March 2020, Chile is an adherent to the Fund’s Special Data Dissemination Standard Plus—the highest tier of the IMF’s Data Standards Initiatives.

26. Institutional strength and track record of strong policies. Chile has a sustained track record of implementing very strong policies. Fiscal and monetary policies have been strongly countercyclical, anchored in very strong institutional frameworks. The free-floating exchange rate regime has been allowed to work as a shock absorber. In the recent period, the authorities’ response to the pandemic was effective and well-coordinated, making appropriate use of Chile’s hard-won policy space. The ongoing removal of macroeconomic stimulus, while targeting support to the most vulnerable, will help contain inflationary pressures, rebuild buffers, and mitigate risks. The new administration is committed to maintaining very strong macroeconomic policies.

Rationale for SLL Proposal and Access Considerations

27. An SLL arrangement would appropriately support Chile’s external resilience. Against the speedy recovery, the ongoing removal of the extraordinary Covid-19 stimulus, and the build-up of adequate FX liquidity buffers, the authorities wish to exit the FCL. Although risks and uncertainty have diminished since the onset of the pandemic, Chile continues to be exposed to shocks, including volatility in international capital markets that could potentially inflict pressure on the capital account. An SLL would complement existing buffers, make available predictable FX liquidity support on advantageous terms, and provide a confidence signal on Chile’s very strong fundamentals and institutional policy frameworks.

28. An SLL arrangement with revolving access of 145 percent of quota (SDR 2.529 billion; about US$3.5 billion) would cover most moderate, potential, short-term balance of payment needs.^²¹ Access of 145 percent of quota would cover balance of payment needs resulting from capital outflow shocks up to the 75^th percentile of past outflow episodes. Given the build-up of FX liquidity buffers and the effective role of the flexible exchange rate as a shock absorber, the BCCh foresees drawing on the SLL only under exceptional circumstances.

Safeguards

29. Chile’s capacity to repay the Fund remains strong. As envisaged under the SLL policy, the authorities plan to treat the proposed SLL arrangement as precautionary. Even if Chile were to draw all the resources available under the proposed SLL, its capacity to repay the Fund would remain manageable. In the event of a full purchase of the SLL resources, total external debt would increase moderately to 70 percent of GDP in 2023 and then decrease over the medium term. The peak stock of Fund credit in percent of GDP (1 percent), gross international reserves (6.9 percent), total external debt stock (1.5 percent), as well as peak debt service to the Fund in percent of GDP (1 percent) and exports of goods and services (2.9 percent) are all below typical exceptional access cases. Moreover, Chile has a good track record of meeting its obligations to the Fund. Several factors further mitigate risks to the Fund, including Chile’s adequate buffers, very strong policies and policy frameworks, and proven resilience.

30. SLL safeguards procedures are underway. In preparation for the proposed SLL arrangement, the BCCh has provided the authorization for an update of the safeguards procedures to be conducted by Fund staff in relation to the proposed arrangement. Safeguards procedures will be conducted based on a review of the most recently completed external audit of BCCh annual financial statements. A similar procedure was carried out for Chile’s FCL arrangement based on staff’s review of the 2019 audit results and discussions with the BCCh and its external auditors. No significant issues emerged.

Staff Appraisal

31. Staff considers that Chile meets the qualification criteria for access to SLL resources. Chile has very strong fundamentals and policy frameworks, and a sustained track record of implementing very strong policies that have supported the country’s resilience in the face of large shocks. The authorities remain committed to maintaining very strong policies in the future. Staff considers that Chile meets all the qualification criteria for an SLL (which are identical to the FCL).

32. Staff recommends that the Board extends an SLL “offer” to Chile for 145 percent of quota (SDR 2.529 billion). Although risks and uncertainty have declined since the onset of the pandemic, they remain elevated. The SLL would complement the authorities’ strategy to exit the FCL and support external resilience. An SLL is an appropriate instrument, as it would provide access to FX liquidity to counter potential, moderate, short-term balance of payment needs related to capital account pressures. If the Executive Board approves the SLL arrangement, such approval will be contingent on receiving written communication from the authorities stating that they wish to avail themselves of the SLL arrangement, and upon notification to the Fund by the authorities of the cancelation of the existing FCL arrangement. Funds from the new SLL arrangement could be accessed at any point during the next 12 months following effectiveness of the SLL.

^{Table 1.}

Chile: Selected Social and Economic Indicators ^1/

Sources: Central Bank of Chile, Ministry of Finance, Haver Analytics, and IMF staff calculations and projections.

^{^1/}The annual numbers occasionally show a small discrepancy with the authorities’ published figures, as they are calculated as the sum of the quarterly series seasonally-adjusted by staff.

^{^2/}Investment is defined as: gross fixed capital formation + changes in inventories.

^{^3/}Contribution to growth.

^{^4/}Includes liabilities of the central government, the Central Bank of Chile and public enterprises. Excludes Recognition Bonds.

^{Table 1.}

Chile: Selected Social and Economic Indicators ^1/

GDP (2020), in billions of pesos	200,023	Quota
GDP (2020), in billions of U.S. dollars	252.5	in millions of SDRs	1,744
Per capita (2020), US. dollars	13,209	in % of total	0.37
Population (2020), in millions	19.1	Poverty rate C2O20)	10.80
Main products and exports	Copper	Gini coefficient (2017)	44.40
Key export markets	China, Euro area, U.S.	Literacy rate (2017)	96.4

							Est.	Proj.
					2019	2020	2021	2022	2023	2024	2025	2026	2027
					(Annual percentage change, unless otherwise specified)
Output
Real GDP					0.8	-6.1	11.7	1.5	0.5	1.7	2.2	2.3	2.3
	Total domestic demand				0.9	-9.5	21.7	-0.1	-0.8	1.5	2.0	2.5	2.4
		Consumption			0.8	-7.4	18.3	-1.6	-0.1	1.8	2.1	2.5	2.5
			Private		0.9	-8.2	20.4	-1.8	-0 3	2.0	2.1	3.0	2.7
			Public		0.8	-4.0	9.8	-0.8	1.0	1.1	2.2	3.0	2.0
		Investment ^2/			1.4	-16.1	33.6	4.4	-2.9	0.8	1.7	2.7	2.1
			Fixed		4.7	-9.5	17.7	-3.8	0.2	1.5	1.8	2.5	2.2
				Private	5.3	-8.9	18.1	-2.3	-0.3	1.6	1.7	3.0	2.4
				Public	-1.3	-15.3	13.1	-20.4	7.3	0.6	3.3	-3.9	-0.6
			Inventories ^3/		-0.8	-1.7	3.3	2.1	-0.8	-0 1	0.0	0.1	0.0
		Net exports ^3/			-0.2	3.4	-8.8	1.2	1.3	0.1	0.2	-0.1	0.0
			Exports		-2.5	-1.2	-1.5	4.1	34	2 9	2.6	2.0	23
			Imports		-1.7	-12.8	31.2	-0.5	-1.4	2.4	1.8	2.7	2.4
Employment
Unemployment rate (annual average)					7.2	10.8	8.9	7.0	6.9	6.8	6.8	6.8	6.8
Consumer Prices
Inflation (End of period, %)					2.9	2.9	7.1	6.0	3.9	3.0	3.0	3.0	3.0
Inflation (average, %)					2.3	3.0	4.5	7.5	4.5	3.3	3.0	3.0	3.0
					(In percent of GDP, unless otherwise specified)
Public Sector Finances
Central government revenue					21.7	20.1	23.9	23.3	23.6	23.8	23.4	23.3	23.1
Central government expenditure					24.6	27.4	31.6	24.9	24.3	24.2	23.8	23.7	23.5
Central government fiscal balance					-2.9	-7.3	-7.7	-1.7	-0.7	-0.4	-0.4	-0.4	-0.4
Central government structural fiscal balance					-1.7	-2.4	-11.5	4.1	-2.2	-1.2	-0.7	0.4	0 4
Structural non-mining primary balance (% of GDP)					-3.0	-3.3	-11.9	-5.6	-4.1	-3.0	-2.4	-2.2	-1.9
Central government gross debt					28.3	32.6	36.3	38.3	38.4	37.6	37.8	37.9	37.9
	of which, FX-denominated debt				5.8	7.5	12.8	12.2	12.0	11.7	11.4	11.3	11.6
Central government debt net of treasury assets					18.6	24.2	31.0	31.8	33.3	32.9	33.5	33.9	33.8
Public sector gross debt ^4/					49.2	59.4	63.2	65.1	65.3	64.4	64.7	64.7	64.8
		of which, share of FX-denominated debt			5.8	7.5	12.8	12.2	12.0	11.7	11.4	11.3	11.6
					(Annual percentage change, unless otherwise specified)
Money and Credit
Broad money					9.4	6.1	10.7	7.5	5.5	4.8	5.1	5.2	5.3
Credit to the private sector					9.7	3.7	…	…	…	…	…	…	…
Balance of Payments
Current account (% of GDP)					-5.2	-1.9	-6.7	-4.5	3.4	-2.9	-2.7	-2.5	-2.5
Current account (in billions of U.S. dollars)					-14.5	-4.8	-21.2	-14.3	-12.0	-10.9	-10.8	-10.6	-11.5
Foreign direct investment net flows (% of GDP)					-1.2	-1.0	-0.3	-1.0	-1.2	-1.0	-0.9	-0.9	-1.0
Gross international reserves (in billions of U.S. dollars)					40.7	39.2	51.3	51.3	51.3	51.3	51.3	51.3	51.3
	Gross reserves (months of next year imports)				5.6	5.7	9.1	6.0	5.3	5.4	5.3	5.2	5.0
Gross external debt (% of GDP)					66.7	77.9	72.4	74.6	68.8	65.3	62.7	60.9	59.7
	Public				6.2	8.9	12.5	13.7	13.3	12.8	12.4	12.2	12.4
	Private				60.5	69.0	59.9	60.9	55.6	52.5	50.3	48.7	47.3
					(Annual percentage change)
Relative Prices
Real effective exchange rate (real appreciation +)					-4.7	-8.2	3.3	...	…	…	…	...	…
Terms of trade					-1.8	11.6	12.1	-5.7	0.9	0.0	-0.3	-1.2	-0.7
Memorandum Items
	Nominal GDP (in billions of pesos)				195,809	200,023	240,521	258,531	272,635	285,737	300,391	315,864	332,472
		(percentage change)			3.4	2.2	20.2	7.5	5.5	4.8	5.1	5.2	5.3
	Nominal GDP (in billions of USD)				278.4	252.5	316.9	317.6	351.0	379.0	405.9	431.4	457.1
		(percentage change)			-5.7	-9.3	25.5	0.2	10.5	8.0	7.1	6.3	6.0

Sources: Central Bank of Chile, Ministry of Finance, Haver Analytics, and IMF staff calculations and projections.

^{^1/}The annual numbers occasionally show a small discrepancy with the authorities’ published figures, as they are calculated as the sum of the quarterly series seasonally-adjusted by staff.

^{^2/}Investment is defined as: gross fixed capital formation + changes in inventories.

^{^3/}Contribution to growth.

^{^4/}Includes liabilities of the central government, the Central Bank of Chile and public enterprises. Excludes Recognition Bonds.

^{Table 1.}

Chile: Selected Social and Economic Indicators ^1/

GDP (2020), in billions of pesos	200,023	Quota
GDP (2020), in billions of U.S. dollars	252.5	in millions of SDRs	1,744
Per capita (2020), US. dollars	13,209	in % of total	0.37
Population (2020), in millions	19.1	Poverty rate C2O20)	10.80
Main products and exports	Copper	Gini coefficient (2017)	44.40
Key export markets	China, Euro area, U.S.	Literacy rate (2017)	96.4

							Est.	Proj.
					2019	2020	2021	2022	2023	2024	2025	2026	2027
					(Annual percentage change, unless otherwise specified)
Output
Real GDP					0.8	-6.1	11.7	1.5	0.5	1.7	2.2	2.3	2.3
	Total domestic demand				0.9	-9.5	21.7	-0.1	-0.8	1.5	2.0	2.5	2.4
		Consumption			0.8	-7.4	18.3	-1.6	-0.1	1.8	2.1	2.5	2.5
			Private		0.9	-8.2	20.4	-1.8	-0 3	2.0	2.1	3.0	2.7
			Public		0.8	-4.0	9.8	-0.8	1.0	1.1	2.2	3.0	2.0
		Investment ^2/			1.4	-16.1	33.6	4.4	-2.9	0.8	1.7	2.7	2.1
			Fixed		4.7	-9.5	17.7	-3.8	0.2	1.5	1.8	2.5	2.2
				Private	5.3	-8.9	18.1	-2.3	-0.3	1.6	1.7	3.0	2.4
				Public	-1.3	-15.3	13.1	-20.4	7.3	0.6	3.3	-3.9	-0.6
			Inventories ^3/		-0.8	-1.7	3.3	2.1	-0.8	-0 1	0.0	0.1	0.0
		Net exports ^3/			-0.2	3.4	-8.8	1.2	1.3	0.1	0.2	-0.1	0.0
			Exports		-2.5	-1.2	-1.5	4.1	34	2 9	2.6	2.0	23
			Imports		-1.7	-12.8	31.2	-0.5	-1.4	2.4	1.8	2.7	2.4
Employment
Unemployment rate (annual average)					7.2	10.8	8.9	7.0	6.9	6.8	6.8	6.8	6.8
Consumer Prices
Inflation (End of period, %)					2.9	2.9	7.1	6.0	3.9	3.0	3.0	3.0	3.0
Inflation (average, %)					2.3	3.0	4.5	7.5	4.5	3.3	3.0	3.0	3.0
					(In percent of GDP, unless otherwise specified)
Public Sector Finances
Central government revenue					21.7	20.1	23.9	23.3	23.6	23.8	23.4	23.3	23.1
Central government expenditure					24.6	27.4	31.6	24.9	24.3	24.2	23.8	23.7	23.5
Central government fiscal balance					-2.9	-7.3	-7.7	-1.7	-0.7	-0.4	-0.4	-0.4	-0.4
Central government structural fiscal balance					-1.7	-2.4	-11.5	4.1	-2.2	-1.2	-0.7	0.4	0 4
Structural non-mining primary balance (% of GDP)					-3.0	-3.3	-11.9	-5.6	-4.1	-3.0	-2.4	-2.2	-1.9
Central government gross debt					28.3	32.6	36.3	38.3	38.4	37.6	37.8	37.9	37.9
	of which, FX-denominated debt				5.8	7.5	12.8	12.2	12.0	11.7	11.4	11.3	11.6
Central government debt net of treasury assets					18.6	24.2	31.0	31.8	33.3	32.9	33.5	33.9	33.8
Public sector gross debt ^4/					49.2	59.4	63.2	65.1	65.3	64.4	64.7	64.7	64.8
		of which, share of FX-denominated debt			5.8	7.5	12.8	12.2	12.0	11.7	11.4	11.3	11.6
					(Annual percentage change, unless otherwise specified)
Money and Credit
Broad money					9.4	6.1	10.7	7.5	5.5	4.8	5.1	5.2	5.3
Credit to the private sector					9.7	3.7	…	…	…	…	…	…	…
Balance of Payments
Current account (% of GDP)					-5.2	-1.9	-6.7	-4.5	3.4	-2.9	-2.7	-2.5	-2.5
Current account (in billions of U.S. dollars)					-14.5	-4.8	-21.2	-14.3	-12.0	-10.9	-10.8	-10.6	-11.5
Foreign direct investment net flows (% of GDP)					-1.2	-1.0	-0.3	-1.0	-1.2	-1.0	-0.9	-0.9	-1.0
Gross international reserves (in billions of U.S. dollars)					40.7	39.2	51.3	51.3	51.3	51.3	51.3	51.3	51.3
	Gross reserves (months of next year imports)				5.6	5.7	9.1	6.0	5.3	5.4	5.3	5.2	5.0
Gross external debt (% of GDP)					66.7	77.9	72.4	74.6	68.8	65.3	62.7	60.9	59.7
	Public				6.2	8.9	12.5	13.7	13.3	12.8	12.4	12.2	12.4
	Private				60.5	69.0	59.9	60.9	55.6	52.5	50.3	48.7	47.3
					(Annual percentage change)
Relative Prices
Real effective exchange rate (real appreciation +)					-4.7	-8.2	3.3	...	…	…	…	...	…
Terms of trade					-1.8	11.6	12.1	-5.7	0.9	0.0	-0.3	-1.2	-0.7
Memorandum Items
	Nominal GDP (in billions of pesos)				195,809	200,023	240,521	258,531	272,635	285,737	300,391	315,864	332,472
		(percentage change)			3.4	2.2	20.2	7.5	5.5	4.8	5.1	5.2	5.3
	Nominal GDP (in billions of USD)				278.4	252.5	316.9	317.6	351.0	379.0	405.9	431.4	457.1
		(percentage change)			-5.7	-9.3	25.5	0.2	10.5	8.0	7.1	6.3	6.0

Sources: Central Bank of Chile, Ministry of Finance, Haver Analytics, and IMF staff calculations and projections.

^{^1/}The annual numbers occasionally show a small discrepancy with the authorities’ published figures, as they are calculated as the sum of the quarterly series seasonally-adjusted by staff.

^{^2/}Investment is defined as: gross fixed capital formation + changes in inventories.

^{^3/}Contribution to growth.

^{^4/}Includes liabilities of the central government, the Central Bank of Chile and public enterprises. Excludes Recognition Bonds.

^{Table 2.}

Chile: Summary Operations of the Central Government

(In percent of GDP, unless otherwise specified)

Sources: Ministry of Finance and IMF staff calculations and projections.

^{^1/}The Fiscal Impulse is defined as the negative of the annual change of the structural non-mining primary balance.

^{^2/}Includes liabilities of the central government, the cental bank of Chile and non-financial public enterprises. Excludes Recognition Bonds.

^{^3/}Includes the central government and municipality governments.

^{Table 2.}

Chile: Summary Operations of the Central Government

(In percent of GDP, unless otherwise specified)

								Est.	Proj.
						2019	2020	2021	2022	2023	2024	2025	2026	2027
Revenues						21.7	20.1	23.9	23.3	23.6	23.8	23.4	23.3	23.1
		Taxes				17.7	16.1	18.8	18.3	18.3	19.0	19.0	19.1	19.1
					Private mining companies	1.0	0.7	1.2	1.9	1.6	1.3	1.2	1.2	1.2
					Other tax revenues, non-mining	16.7	15.5	17.6	16.4	16.8	17.7	17.8	17.9	17.9
			Social contributions			-1.5	1.6	1.2	1.2	1.2	1.2	1.2	1.2	1.2
			Grants			0.1	0.1	0.0	0.1	0.1	0.1	0.1	0.1	0.1
			Other revenue			2.4	2.3	3.8	3.8	4.1	3.6	3.1	2.9	2.8
					Codelco revenues	0.4	0.5	1.8	1.9	2.2	1.7	1.2	1.0	0.9
					Income on assets	0.6	0.4	0.2	0.5	0.5	0.5	0.5	0.5	0.5
					Operating income	0.5	0.4	0.5	0.5	0.5	0.5	0.5	0.5	0.5
					Other income	1.0	1.0	1.2	0.9	0.9	0.9	0.9	0.9	0.9
Expenditures						24.6	27.4	31.6	24.9	24.3	24.2	23.8	23.7	23.5
		Expense				22.5	25.6	29.8	23.6	22.9	22.7	22.3	22.3	22.1
				Compensation of employees		5.0	5.3	4.8	4.9	5.0	5.0	5.0	5.0	5.0
				Purchases of goods and services		2.0	2.2	2.0	1.8	1.7	1.7	1.7	1.7	1.7
				Interest payments		0.9	1.0	0.9	0.8	0.9	0.9	0.9	0.9	1.1
				Subsidies and grants		8.8	11.1	16.8	10.2	9.5	9.4	8.9	8.9	8.6
				Social benefits		4.0	4.4	3.7	4.0	4.0	4.0	4.0	4.0	4.0
				Other expense		1.8	1.7	1.6	1.8	1.8	1.8	1.8	1.8	1.8
		Net acquistion of nonfinancial assets				2.1	1.8	1.8	1.4	1.5	1.5	1.5	1.4	1.4
				Investment		2.1	1.8	1.8	1.4	1.5	1.5	1.5	1.4	1.4
Net Lending/Borrowing						-2.9	-7.3	-7.7	-1.7	-0.7	-0.4	-0.4	-0.4	-0.4
	Non-mining overall balance					-4.2	-8.5	-10.7	-5.5	-4.5	-3.4	-2.8	-2.6	-2.5
Net Financial Transactions						-2.9	-7.3	-7.7	-1.7	-0.7	-0.4	-0.4	-0.4	-0.4
		Net acquistion of financial assets				-0.6	-3.2	-1.6	3.0	1.3	0.4	1.5	1.2	1.2
		Net incurrence of liabilities				2.2	4.1	6.0	4.6	2.0	0.8	1.8	1.6	1.6
				Domestic		2.0	2.5	1.3	3.5	1.2	0.4	1.5	1.1	0.7
				External		0.5	1.8	4.8	1.2	0.8	0.5	0.4	0.6	0.9
				Recognition bonds		-0.2	-0.2	-0.1	-0.1	-0.1	0.1	0.0	0.0	0.0
Memorandum Items
		Primary balance				-2.5	-6.8	-7.1	-1.3	-0.3	0.0	0.0	0.0	0.2
		Structural Fiscal Balance				-1.7	-2.4	-11.5	-4.4	-2.2	-1.2	-0.7	-0.4	-0.4
			Structural Revenue			22.9	25.0	20.0	20.5	22.1	23.0	23.1	23.3	23.1
			Fiscal Impulse ^1/			0.5	0.4	8.5	-6.2	-1.5	-1.1	-0.6	-0.2	-0.3
		Expenditure growth (in real terms; annual percent change)				4.2	10.4	32.5	-20.9	-1.6	0.9	0.3	1.9	1.4
		Central Government debt net of treasury assets				18.6	24.2	31.0	31.8	33.3	32.9	33.5	33.9	33.8
		Central Government gross debt				28.3	32.6	36.3	38.3	38.4	37.6	37.8	37.9	37.9
		Public Sector Gross Debt ^2/				49.2	59.4	63.2	65.1	65.3	64.4	64.7	64.7	64.8
		Public Sector debt net of treasury assets ^2/				39.5	51.1	57.9	58.7	60.2	59.8	60.3	60.7	60.7
		General Government Fiscal Balance ^3/				-2.7	-7.2	-7.5	-1.5	-0.6	-0.3	-0.2	-0.3	0.0
		Nominal GDP (trillions of pesos)				195.8	200.0	240.5	258.5	272.6	285.7	300.4	315.9	332.5

Sources: Ministry of Finance and IMF staff calculations and projections.

^{^1/}The Fiscal Impulse is defined as the negative of the annual change of the structural non-mining primary balance.

^{^2/}Includes liabilities of the central government, the cental bank of Chile and non-financial public enterprises. Excludes Recognition Bonds.

^{^3/}Includes the central government and municipality governments.

^{Table 2.}

Chile: Summary Operations of the Central Government

(In percent of GDP, unless otherwise specified)

								Est.	Proj.
						2019	2020	2021	2022	2023	2024	2025	2026	2027
Revenues						21.7	20.1	23.9	23.3	23.6	23.8	23.4	23.3	23.1
		Taxes				17.7	16.1	18.8	18.3	18.3	19.0	19.0	19.1	19.1
					Private mining companies	1.0	0.7	1.2	1.9	1.6	1.3	1.2	1.2	1.2
					Other tax revenues, non-mining	16.7	15.5	17.6	16.4	16.8	17.7	17.8	17.9	17.9
			Social contributions			-1.5	1.6	1.2	1.2	1.2	1.2	1.2	1.2	1.2
			Grants			0.1	0.1	0.0	0.1	0.1	0.1	0.1	0.1	0.1
			Other revenue			2.4	2.3	3.8	3.8	4.1	3.6	3.1	2.9	2.8
					Codelco revenues	0.4	0.5	1.8	1.9	2.2	1.7	1.2	1.0	0.9
					Income on assets	0.6	0.4	0.2	0.5	0.5	0.5	0.5	0.5	0.5
					Operating income	0.5	0.4	0.5	0.5	0.5	0.5	0.5	0.5	0.5
					Other income	1.0	1.0	1.2	0.9	0.9	0.9	0.9	0.9	0.9
Expenditures						24.6	27.4	31.6	24.9	24.3	24.2	23.8	23.7	23.5
		Expense				22.5	25.6	29.8	23.6	22.9	22.7	22.3	22.3	22.1
				Compensation of employees		5.0	5.3	4.8	4.9	5.0	5.0	5.0	5.0	5.0
				Purchases of goods and services		2.0	2.2	2.0	1.8	1.7	1.7	1.7	1.7	1.7
				Interest payments		0.9	1.0	0.9	0.8	0.9	0.9	0.9	0.9	1.1
				Subsidies and grants		8.8	11.1	16.8	10.2	9.5	9.4	8.9	8.9	8.6
				Social benefits		4.0	4.4	3.7	4.0	4.0	4.0	4.0	4.0	4.0
				Other expense		1.8	1.7	1.6	1.8	1.8	1.8	1.8	1.8	1.8
		Net acquistion of nonfinancial assets				2.1	1.8	1.8	1.4	1.5	1.5	1.5	1.4	1.4
				Investment		2.1	1.8	1.8	1.4	1.5	1.5	1.5	1.4	1.4
Net Lending/Borrowing						-2.9	-7.3	-7.7	-1.7	-0.7	-0.4	-0.4	-0.4	-0.4
	Non-mining overall balance					-4.2	-8.5	-10.7	-5.5	-4.5	-3.4	-2.8	-2.6	-2.5
Net Financial Transactions						-2.9	-7.3	-7.7	-1.7	-0.7	-0.4	-0.4	-0.4	-0.4
		Net acquistion of financial assets				-0.6	-3.2	-1.6	3.0	1.3	0.4	1.5	1.2	1.2
		Net incurrence of liabilities				2.2	4.1	6.0	4.6	2.0	0.8	1.8	1.6	1.6
				Domestic		2.0	2.5	1.3	3.5	1.2	0.4	1.5	1.1	0.7
				External		0.5	1.8	4.8	1.2	0.8	0.5	0.4	0.6	0.9
				Recognition bonds		-0.2	-0.2	-0.1	-0.1	-0.1	0.1	0.0	0.0	0.0
Memorandum Items
		Primary balance				-2.5	-6.8	-7.1	-1.3	-0.3	0.0	0.0	0.0	0.2
		Structural Fiscal Balance				-1.7	-2.4	-11.5	-4.4	-2.2	-1.2	-0.7	-0.4	-0.4
			Structural Revenue			22.9	25.0	20.0	20.5	22.1	23.0	23.1	23.3	23.1
			Fiscal Impulse ^1/			0.5	0.4	8.5	-6.2	-1.5	-1.1	-0.6	-0.2	-0.3
		Expenditure growth (in real terms; annual percent change)				4.2	10.4	32.5	-20.9	-1.6	0.9	0.3	1.9	1.4
		Central Government debt net of treasury assets				18.6	24.2	31.0	31.8	33.3	32.9	33.5	33.9	33.8
		Central Government gross debt				28.3	32.6	36.3	38.3	38.4	37.6	37.8	37.9	37.9
		Public Sector Gross Debt ^2/				49.2	59.4	63.2	65.1	65.3	64.4	64.7	64.7	64.8
		Public Sector debt net of treasury assets ^2/				39.5	51.1	57.9	58.7	60.2	59.8	60.3	60.7	60.7
		General Government Fiscal Balance ^3/				-2.7	-7.2	-7.5	-1.5	-0.6	-0.3	-0.2	-0.3	0.0
		Nominal GDP (trillions of pesos)				195.8	200.0	240.5	258.5	272.6	285.7	300.4	315.9	332.5

Sources: Ministry of Finance and IMF staff calculations and projections.

^{^1/}The Fiscal Impulse is defined as the negative of the annual change of the structural non-mining primary balance.

^{^2/}Includes liabilities of the central government, the cental bank of Chile and non-financial public enterprises. Excludes Recognition Bonds.

^{^3/}Includes the central government and municipality governments.

^{Table 3.}

Chile: Balance of Payments ^1/

(In US$ billions, unless otherwise specified)

Sources: Central Bank of Chile, Haver Analytics, and IMF staff calculations and projections.

^{^1/}The annual numbers occasionally show a small discrepancy with the authorities published figures, as they are calculated as the sum of the quarterly series seasonally-adjusted by staff.

^{^2/}Excluding change in reserves.

^{Table 3.}

Chile: Balance of Payments ^1/

(In US$ billions, unless otherwise specified)

						Est.	Proj.
				2019	2020	2021	2022	2023	2024	2025	2026	2027
Current Account				-14.5	-4.8	-21.2	-14.3	-12.0	-10.9	-10.8	-10.6	-11.5
Trade balance				2.9	18.5	10.8	14.2	19.6	20.4	21.3	20.5	20.4
	Exports			68.8	73.5	94.8	107.5	111.1	114.0	116.8	119.6	123.0
		Copper		32.6	37.8	53.4	58.9	60.9	62.1	63.1	64.3	66.0
		Non-copper		36.2	35.7	41.3	48.5	50.2	51.8	53.6	55.3	57.0
	Imports			65.9	55.0	84.0	93.3	91.5	93.6	95.5	99.1	102.5
Net services				-8.1	-7.4	-12.0	-12.8	-12.5	-13.0	-13.1	-13.6	-14.1
Net income				-10.4	-15.9	-19.6	-15.6	-19.3	-18.5	-19.3	-17.8	-18.0
Net transfers				1.0	0.0	-0.4	-0.1	0.2	0.3	0.3	0.2	0.2
Capital account balance				1.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0
Financial Account Balance				-10.7	-3.1	-34.6	-14.3	-12.0	-10.9	-10.8	-10.6	-11.5
	Foreign direct investment			-3.2	-2.5	-0.8	-3.1	-4.3	-3.8	-3.8	-3.9	-4.5
		Abroad by Chilean residents		10.3	6.7	14.5	7.2	8.1	9.4	9.2	9.7	8.7
		In Chile by foreign residents		13.6	9.2	15.3	10.3	12.4	13.1	12.9	13.6	13.2
			Of which, debt instruments	1.8	0.3	1.1	0.3	0.6	0.9	0.7	0.7	0.7
	Portfolio investment			-10.6	-13.2	-30.6	-15.5	-18.4	-20.4	-22.3	-20.1	-21.4
		Abroad by Chilean residents		0.8	-5.9	1.6	-0.2	-1.0	-1.5	-0.3	-0.8	-0.9
		In Chile by foreign residents		11.4	7.2	32.2	15.3	17.4	18.9	22.0	19.3	20.4
			Of which, equities	3.0	0.2	2.4	1.1	1.3	1.4	1.6	1.4	1.5
			Of which, debt	8.5	7.0	29.8	14.1	16.1	17.5	20.4	17.9	18.9
	Financial derivatives			1.5	2.5	0.0	0.0	0.0	0.0	0.0	0.0	0.0
	Other investments			1.7	10.0	-3.2	4.3	10.8	13.3	15.2	13.5	14.4
		Abroad by Chilean residents		3.1	7.8	8.1	8.1	8.1	8.1	8.1	8.1	8.1
		In Chile by foreign residents		1.4	-2.3	11.3	3.8	-2.7	-5.2	-7.2	-5.4	-6.3
Change in Reserves Assets				-0.2	-2.9	12.2	0.0	0.0	0.0	0.0	0.0	0.0
Errors and omissions				2.6	-1.2	-1.2	0.0	0.0	0.0	0.0	0.0	0.0
Gross international reserves				40.7	39.2	51.3	51.3	51.3	51.3	51.3	51.3	51.3
	Gross reserves (months of next year imports)			5.6	5.7	9.1	6.0	5.3	5.4	5.3	5.2	5.0
				(In percent of GDP)
Current Account				-5.2	-1.9	-6.7	-4.5	-3.4	-2.9	-2.7	-2.5	-2.5
Trade balance of Goods				1.0	7.3	3.4	4.5	5.6	5.4	5.2	4.7	4.5
	Exports			24.7	29.1	29.9	33.8	31.6	30.1	28.8	27.7	26.9
		Copper		11.7	15.0	16.9	18.6	17.3	16.4	15.6	14.9	14.4
		Non-copper		13.0	14.1	13.0	15.3	14.3	13.7	13.2	12.8	12.5
	Imports			23.7	21.8	26.5	29.4	26.1	24.7	23.5	23.0	22.4
Net services				-2.9	-2.9	-3.8	-4.0	-3.6	-3.4	-3.2	-3.1	-3.1
Net income				-3.7	-6.3	-6.2	-4.9	-5.5	-4.9	-4.8	-4.1	-3.9
Net transfers				0.3	0.0	-0.1	0.0	0.1	0.1	0.1	0.1	0.0
Financial Account Balance ^2/				-3.8	-1.2	-10.9	-4.5	-3.4	-2.9	-2.7	-2.5	-2.5
				(Annual change in percent)
Total export volume				-2.1	2.6	-0.9	3.5	3.4	2.9	2.6	2.6	2.5
Total import volume				-2.1	-10.2	34.8	-0.2	-1.4	2.4	1.8	2.7	2.4
Terms of trade				-1.8	11.6	12.1	-5.7	0.9	0.0	-0.3	-1.2	-0.7
	Export prices			-5.9	5.0	29.0	7.2	0.0	-0.3	-0.2	-0.1	0.3
		Copper export price		-7.5	16.0	43.4	5.6	-0.6	-1.4	-1.6	-1.3	-0.5
	Import prices			-4.3	-5.9	15.2	13.8	-0.9	-0.2	0.1	1.0	1.0
Memorandum Items
Copper price (WEO; U.S. cents per pound)				273	280	423	458	456	450	442	437	435
Volume of copper exports (2004=100)				104	106	102	105	109	113	117	120	124

Sources: Central Bank of Chile, Haver Analytics, and IMF staff calculations and projections.

^{^1/}The annual numbers occasionally show a small discrepancy with the authorities published figures, as they are calculated as the sum of the quarterly series seasonally-adjusted by staff.

^{^2/}Excluding change in reserves.

^{Table 3.}

Chile: Balance of Payments ^1/

(In US$ billions, unless otherwise specified)

						Est.	Proj.
				2019	2020	2021	2022	2023	2024	2025	2026	2027
Current Account				-14.5	-4.8	-21.2	-14.3	-12.0	-10.9	-10.8	-10.6	-11.5
Trade balance				2.9	18.5	10.8	14.2	19.6	20.4	21.3	20.5	20.4
	Exports			68.8	73.5	94.8	107.5	111.1	114.0	116.8	119.6	123.0
		Copper		32.6	37.8	53.4	58.9	60.9	62.1	63.1	64.3	66.0
		Non-copper		36.2	35.7	41.3	48.5	50.2	51.8	53.6	55.3	57.0
	Imports			65.9	55.0	84.0	93.3	91.5	93.6	95.5	99.1	102.5
Net services				-8.1	-7.4	-12.0	-12.8	-12.5	-13.0	-13.1	-13.6	-14.1
Net income				-10.4	-15.9	-19.6	-15.6	-19.3	-18.5	-19.3	-17.8	-18.0
Net transfers				1.0	0.0	-0.4	-0.1	0.2	0.3	0.3	0.2	0.2
Capital account balance				1.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0
Financial Account Balance				-10.7	-3.1	-34.6	-14.3	-12.0	-10.9	-10.8	-10.6	-11.5
	Foreign direct investment			-3.2	-2.5	-0.8	-3.1	-4.3	-3.8	-3.8	-3.9	-4.5
		Abroad by Chilean residents		10.3	6.7	14.5	7.2	8.1	9.4	9.2	9.7	8.7
		In Chile by foreign residents		13.6	9.2	15.3	10.3	12.4	13.1	12.9	13.6	13.2
			Of which, debt instruments	1.8	0.3	1.1	0.3	0.6	0.9	0.7	0.7	0.7
	Portfolio investment			-10.6	-13.2	-30.6	-15.5	-18.4	-20.4	-22.3	-20.1	-21.4
		Abroad by Chilean residents		0.8	-5.9	1.6	-0.2	-1.0	-1.5	-0.3	-0.8	-0.9
		In Chile by foreign residents		11.4	7.2	32.2	15.3	17.4	18.9	22.0	19.3	20.4
			Of which, equities	3.0	0.2	2.4	1.1	1.3	1.4	1.6	1.4	1.5
			Of which, debt	8.5	7.0	29.8	14.1	16.1	17.5	20.4	17.9	18.9
	Financial derivatives			1.5	2.5	0.0	0.0	0.0	0.0	0.0	0.0	0.0
	Other investments			1.7	10.0	-3.2	4.3	10.8	13.3	15.2	13.5	14.4
		Abroad by Chilean residents		3.1	7.8	8.1	8.1	8.1	8.1	8.1	8.1	8.1
		In Chile by foreign residents		1.4	-2.3	11.3	3.8	-2.7	-5.2	-7.2	-5.4	-6.3
Change in Reserves Assets				-0.2	-2.9	12.2	0.0	0.0	0.0	0.0	0.0	0.0
Errors and omissions				2.6	-1.2	-1.2	0.0	0.0	0.0	0.0	0.0	0.0
Gross international reserves				40.7	39.2	51.3	51.3	51.3	51.3	51.3	51.3	51.3
	Gross reserves (months of next year imports)			5.6	5.7	9.1	6.0	5.3	5.4	5.3	5.2	5.0
				(In percent of GDP)
Current Account				-5.2	-1.9	-6.7	-4.5	-3.4	-2.9	-2.7	-2.5	-2.5
Trade balance of Goods				1.0	7.3	3.4	4.5	5.6	5.4	5.2	4.7	4.5
	Exports			24.7	29.1	29.9	33.8	31.6	30.1	28.8	27.7	26.9
		Copper		11.7	15.0	16.9	18.6	17.3	16.4	15.6	14.9	14.4
		Non-copper		13.0	14.1	13.0	15.3	14.3	13.7	13.2	12.8	12.5
	Imports			23.7	21.8	26.5	29.4	26.1	24.7	23.5	23.0	22.4
Net services				-2.9	-2.9	-3.8	-4.0	-3.6	-3.4	-3.2	-3.1	-3.1
Net income				-3.7	-6.3	-6.2	-4.9	-5.5	-4.9	-4.8	-4.1	-3.9
Net transfers				0.3	0.0	-0.1	0.0	0.1	0.1	0.1	0.1	0.0
Financial Account Balance ^2/				-3.8	-1.2	-10.9	-4.5	-3.4	-2.9	-2.7	-2.5	-2.5
				(Annual change in percent)
Total export volume				-2.1	2.6	-0.9	3.5	3.4	2.9	2.6	2.6	2.5
Total import volume				-2.1	-10.2	34.8	-0.2	-1.4	2.4	1.8	2.7	2.4
Terms of trade				-1.8	11.6	12.1	-5.7	0.9	0.0	-0.3	-1.2	-0.7
	Export prices			-5.9	5.0	29.0	7.2	0.0	-0.3	-0.2	-0.1	0.3
		Copper export price		-7.5	16.0	43.4	5.6	-0.6	-1.4	-1.6	-1.3	-0.5
	Import prices			-4.3	-5.9	15.2	13.8	-0.9	-0.2	0.1	1.0	1.0
Memorandum Items
Copper price (WEO; U.S. cents per pound)				273	280	423	458	456	450	442	437	435
Volume of copper exports (2004=100)				104	106	102	105	109	113	117	120	124

Sources: Central Bank of Chile, Haver Analytics, and IMF staff calculations and projections.

^{^1/}The annual numbers occasionally show a small discrepancy with the authorities published figures, as they are calculated as the sum of the quarterly series seasonally-adjusted by staff.

^{^2/}Excluding change in reserves.

^{Table 4.}

Chile: Monetary Survey

(In billions of pesos, unless otherwise specified)

Sources: Central Bank of Chile, Haver, and IMF staff calculations.

^{Table 4.}

Chile: Monetary Survey

(In billions of pesos, unless otherwise specified)

			2015	2016	2017	2018	2019	2020	2021
Central Bank
	Net foreign assets		26,645	26,391	23,332	27,043	29,547	27,222	40,891
		Net international reserves	27,333	27,021	23,983	27,731	30,274	27,881	43,643
		Net international reserves (in millions of US$)	38,643	40,494	38,983	39,861	40,657	39,200	51,330
		Other foreign assets, net	-688	-630	-651	-688	-727	-659	-2,752
	Net domestic assets		-17,493	-16,049	-12,226	-15,747	-17,212	3,034	-19,435
		Net credit to general government	-124	-476	-9	-553	-392	327	356
		Net claims on banks and financial corporations	-6,306	-5,028	-3,403	-5,163	-4,599	6,640	7,838
		Credit to the private sector	406	319	189	47	-33	-31	-38
		Other items (net)	-11,469	-10,863	-9,003	-10,077	-12,187	-19,135	-46,647
	Monetary base		9,152	10,343	11,106	11,296	12,335	30,256	21,456
		Currency	5,858	6,275	6,528	6,740	7,576	12,180	15,210
		Required reserves	3,294	4,068	4,577	4,556	4,760	18,077	6,247
Other Depository Institutions
	Net foreign assets		-6,120	-5,394	-7,237	-10,199	-9,700	-1,678	-4,608
	Net foreign assets (in millions of US$)		-8,652	-8,083	-11,763	-14,660	-13,027	-2,359	-5,420
	Net domestic assets		126,310	132,992	139,488	156,578	174,809	166,206	186,314
		Net credit to general government	-532	-256	2,965	3,463	4,615	12,538	17,607
		Credit to the private sector	130,465	137,324	144,061	158,792	174,225	179,836	197,943
		Other items (net)	-3,623	-4,076	-7,538	-5,677	-4,031	-26,168	-29,236
	Liabilities to the private sector		120,190	127,598	132,251	146,379	165,109	164,528	181,706
		Demand deposits	23,562	24,044	27,038	30,116	36,058	56,393	64,091
		Quasi-money	96,628	103,554	105,213	116,263	129,051	108,135	117,615
Banking System
	Net foreign assets		20,526	20,997	16,095	16,844	19,846	25,544	36,283
	Net domestic assets		113,683	120,876	129,252	142,030	156,183	160,617	177,327
		Net credit to general government	-656	-732	2,956	2,910	4,223	12,865	17,963
		Credit to the private sector	130,871	137,643	144,250	1 58,839	174,192	179,805	197,905
		Other items (net)	-16,531	-16,035	-17,954	-19,715	-22,232	-32,053	-38,541
	Liabilities to the private sector		134,209	141,873	145,347	1 58,874	176,029	186,161	213,610
		Money	29,420	30,319	33,566	36,856	43,633	68,573	79,301
		Quasi-money	104,789	111,554	111,781	122,018	132,396	117,588	134,309
Memorandum Items
			(Annual percentage change)
	Monetary base		11.8	13.0	74	1.7	9.2	145.3	-29.1
	Liabilities to the private sector		10.5	5.7	24	9.3	10.8	5.8	14.7
	Credit to the private sector (banking system)		10.7	5.2	4.8	10.1	9.7	3.2	10.1
			(In percent of GDP)
	Monetary base		5.8	6.1	6.2	6.0	6.3	15.1	8.9
	Liabilities to the private sector		84.6	84.1	81.1	83.9	89.9	93,1	88.8
	Credit to the private sector (banking system)		82.5	81.6	80.5	83.9	89.0	89.9	82.3

Sources: Central Bank of Chile, Haver, and IMF staff calculations.

^{Table 4.}

Chile: Monetary Survey

(In billions of pesos, unless otherwise specified)

			2015	2016	2017	2018	2019	2020	2021
Central Bank
	Net foreign assets		26,645	26,391	23,332	27,043	29,547	27,222	40,891
		Net international reserves	27,333	27,021	23,983	27,731	30,274	27,881	43,643
		Net international reserves (in millions of US$)	38,643	40,494	38,983	39,861	40,657	39,200	51,330
		Other foreign assets, net	-688	-630	-651	-688	-727	-659	-2,752
	Net domestic assets		-17,493	-16,049	-12,226	-15,747	-17,212	3,034	-19,435
		Net credit to general government	-124	-476	-9	-553	-392	327	356
		Net claims on banks and financial corporations	-6,306	-5,028	-3,403	-5,163	-4,599	6,640	7,838
		Credit to the private sector	406	319	189	47	-33	-31	-38
		Other items (net)	-11,469	-10,863	-9,003	-10,077	-12,187	-19,135	-46,647
	Monetary base		9,152	10,343	11,106	11,296	12,335	30,256	21,456
		Currency	5,858	6,275	6,528	6,740	7,576	12,180	15,210
		Required reserves	3,294	4,068	4,577	4,556	4,760	18,077	6,247
Other Depository Institutions
	Net foreign assets		-6,120	-5,394	-7,237	-10,199	-9,700	-1,678	-4,608
	Net foreign assets (in millions of US$)		-8,652	-8,083	-11,763	-14,660	-13,027	-2,359	-5,420
	Net domestic assets		126,310	132,992	139,488	156,578	174,809	166,206	186,314
		Net credit to general government	-532	-256	2,965	3,463	4,615	12,538	17,607
		Credit to the private sector	130,465	137,324	144,061	158,792	174,225	179,836	197,943
		Other items (net)	-3,623	-4,076	-7,538	-5,677	-4,031	-26,168	-29,236
	Liabilities to the private sector		120,190	127,598	132,251	146,379	165,109	164,528	181,706
		Demand deposits	23,562	24,044	27,038	30,116	36,058	56,393	64,091
		Quasi-money	96,628	103,554	105,213	116,263	129,051	108,135	117,615
Banking System
	Net foreign assets		20,526	20,997	16,095	16,844	19,846	25,544	36,283
	Net domestic assets		113,683	120,876	129,252	142,030	156,183	160,617	177,327
		Net credit to general government	-656	-732	2,956	2,910	4,223	12,865	17,963
		Credit to the private sector	130,871	137,643	144,250	1 58,839	174,192	179,805	197,905
		Other items (net)	-16,531	-16,035	-17,954	-19,715	-22,232	-32,053	-38,541
	Liabilities to the private sector		134,209	141,873	145,347	1 58,874	176,029	186,161	213,610
		Money	29,420	30,319	33,566	36,856	43,633	68,573	79,301
		Quasi-money	104,789	111,554	111,781	122,018	132,396	117,588	134,309
Memorandum Items
			(Annual percentage change)
	Monetary base		11.8	13.0	74	1.7	9.2	145.3	-29.1
	Liabilities to the private sector		10.5	5.7	24	9.3	10.8	5.8	14.7
	Credit to the private sector (banking system)		10.7	5.2	4.8	10.1	9.7	3.2	10.1
			(In percent of GDP)
	Monetary base		5.8	6.1	6.2	6.0	6.3	15.1	8.9
	Liabilities to the private sector		84.6	84.1	81.1	83.9	89.9	93,1	88.8
	Credit to the private sector (banking system)		82.5	81.6	80.5	83.9	89.0	89.9	82.3

Sources: Central Bank of Chile, Haver, and IMF staff calculations.

^{Table 5.}

Chile: Medium-Term Macroeconomic Framework ^1/

Sources; Central Bank of Chile, Ministry of Finance, National Statistics Institute, Haver Analytics, and IMF staff calculations and projections.

^{^1/}The annual numbers occasionally show a small discrepancy with the authorities published figures, as they are calculated as the sum of the quarterly series seasonally-adjusted by staff.

^{^2/}Investment is defined as: gross fixed capital formation + changes in inventories.

^{^3/}Contribution to growth.

^{Table 5.}

Chile: Medium-Term Macroeconomic Framework ^1/

							Est	Proj.
					2019	2020	2021	2022	2023	2024	2025	2026	2027
National Accounts					(Annual percentage change, unless otherwise specified)
Real GDP					0.8	-6.1	11.7	1.5	0.5	-1.7	2.2	2.5	2.5
	Total domestic demand				0.9	-9.5	21.7	-0.1	-0.8	1.5	2.0	2.5	2.4
		Consumption			0.8	-7.4	18.3	-1.6	-0.1	1.8	2.1	2.5	2.5
			Private		0.9	-8.2	20.4	-1.8	-0.3	2.0	2.1	3.0	2.7
			Public		0.8	-4.0	9.8	-0.8	1.0	1.1	2.2	0.0	2.0
		Investment ^2/			1.4	-16.1	33.6	4.4	-2.9	0.8	1.7	2.7	2.1
			Fixed		4.7	-9.5	17.7	-3.8	0.2	1.5	1.8	2.5	2.2
				Private	5.3	-8.9	18.1	-2 3	-0.3	-0.6	1.7	3.0	2.4
				Public	-1.3	-15.3	13.1	-20.4	7.3	0.6	2.3	-3.9	-0.6
			Inventories ^3/		-0.8	-1.7	3.3	2.1	-0.8	-0.1	0.0	0.1	0.0
	Net exports ^3/				-0.2	3.4	-8.8	1.2	1.3	0.1	0.2	0.1	0.0
			Exports		-2.5	-1.2	-1.5	4.1	3.4	2.9	2.6	7.6	75
			Imports		-1 7	-12.8	31.2	-0.5	-1.4	2.4	1.8	2.7	2.4
Consumer prices
	End of period				3.0	3.0	7.2	6.0	4.0	3.0	3.0	3.0	3.0
	Consumer prices (average)				2.3	3.0	4.5	7.5	4.5	3.3	3.0	3 0	3.0
Nominal GDP growth					3.4	2.2	20.2	7.5	5.5	4.8	5.1	5.2	5.3
Potential growth					1.5	-1.8	2.7	2.2	2.0	2.1	2.3	2.4	2.5
Output gap (percent)					-1.3	-5.6	2.7	2.0	0.5	0.0	0.0	0.0	0.0
Balance of Payments					(In percent of GDP)
Current account					-5.2	-1.9	-6.7	-4.5	-3.4	-2.9	-2.7	-2.5	-2.5
Trade balance					1.0	7.3	3.4	4.5	5.6	5.4	5.2	4.7	4.5
Financial account balance					-3.8	-1.2	-10.9	-4.5	3.4	-2.9	-2.7	-2.5	-2.5
	Of which. foreign direct investment (net)				-1.2	-1.0	-0.3	-1.0	-1.2	-1.0	-0.9	-0.9	-1.0
Change in reserves assets					-0.1	-1.1	3.9	0.0	0.0	0.0	0.0	0.0	0.0
Errors and omissions					0.9	-0.5	-0.4	0.0	0.0	0.0	0.0	0.0	0.0
REER (in percent y/y, +=appreciation)					-4.7	-8.2	3.3	...	...	...	...	...	...
					(Annual percentage change)
Total export volume					-2.1	2.6	-0.9	3.5	3.4	2.9	2.6	2.6	2.5
	Of which, copper export volume				-1.1	1.4	-3.2	2.9	3.9	3.5	3.2	3.1	3.1
Total import volume					.-2.1	-10.2	34.8	-0.2	-1.4	2.4	1.8	2.7	2.4
Terms of trade					-1.8	11.6	12.1	-5.7	0.9	0.0	-0.3	-1.2	-0.7
Export prices					-5.9	5.0	29.0	7.2	0.0	-0.3	-0.2	-0.1	0.3
	Copper export price				-7.5	16.0	43.4	5.6	-0.6	-1.4	-1.6	-1.3	-0.5
Import prices					-4.3	-5.9	15.2	13.8	-0.9	-0.2	0.1	1.0	1.0
External Debt					(In percent of GDP)
Gross external debt					66.7	77.9	72.4	74.6	68.8	65.3	62.7	60.9	59.7
	Public				6.2	8.9	12.5	13.7	13.3	12.8	12.4	12.2	12.4
	Private				60.5	69.0	59.9	60.9	55.6	52.5	50.3	48.7	47.3
Gross int. reserves (in billions of U.S. dollars)					40.7	39.2	51.3	51.3	51.3	51.3	51.3	51.3	51.3
Savings and Investment
Gross domestic investment					25.0	21 6	25.3	26.7	25.8	25.6	25.5	25.7	25.6
	Public				2.3	2.0	2.0	1.6	1.7	1.7	1.7	1.7	1.6
	Private				22.7	19.6	23.3	25.1	24.1	23.9	23.8	24.0	24.0
National saving					19.8	19.9	18.7	22.2	22.4	22.7	22.8	23.2	23.1
	Public				-0.4	-5.1	5.5	0.1	1.1	1.4	1.5	1.4	1,4
	Private				20.3	25.1	24.2	22.1	21.2	21.3	21.4	21.8	21.7
Operations of the Central Government
Central government gross debt					28.3	32.6	36.3	38.3	38.4	37.6	37.8	37.9	37.9
Central government debt net of treasury assets					18.6	24.2	31.0	31.8	33.3	32.9	33.5	33.9	33.8
Central government balance					-2.9	-7.3	-7.7	-1.7	-0.7	-0.4	-0.4	-0.4	-0.4
	Total revenue				21.7	20.1	23.9	23.3	23.6	23.8	23.4	23.3	23.1
	Total expenditure				24.6	27.4	31.6	24.9	24.3	24.2	23.8	23.7	23.5
Central government structural balance					-1.7	-2.4	-11.5	-4.4	-2.2	-1.2	-0.7	-0.4	-0.4
Employment					(Annual percentage change. unless otherwise specified)
Working age population					2.2	20	14	1.1	17	17	1.2	1.2	I 7
Labor force					2.0	-B.9	3.4	0.5	0.8	0,9	1.0	1,0	1.0
Employment					2.-	-12.3	5.5	2.5	0.9	0.9	1.0	1.0	1.0
Unemployment rate (in percent)					7.2	10.7	8.8	7.0	6.9	6.8	6.8	6.8	6.8

Sources; Central Bank of Chile, Ministry of Finance, National Statistics Institute, Haver Analytics, and IMF staff calculations and projections.

^{^1/}The annual numbers occasionally show a small discrepancy with the authorities published figures, as they are calculated as the sum of the quarterly series seasonally-adjusted by staff.

^{^2/}Investment is defined as: gross fixed capital formation + changes in inventories.

^{^3/}Contribution to growth.

^{Table 5.}

Chile: Medium-Term Macroeconomic Framework ^1/

							Est	Proj.
					2019	2020	2021	2022	2023	2024	2025	2026	2027
National Accounts					(Annual percentage change, unless otherwise specified)
Real GDP					0.8	-6.1	11.7	1.5	0.5	-1.7	2.2	2.5	2.5
	Total domestic demand				0.9	-9.5	21.7	-0.1	-0.8	1.5	2.0	2.5	2.4
		Consumption			0.8	-7.4	18.3	-1.6	-0.1	1.8	2.1	2.5	2.5
			Private		0.9	-8.2	20.4	-1.8	-0.3	2.0	2.1	3.0	2.7
			Public		0.8	-4.0	9.8	-0.8	1.0	1.1	2.2	0.0	2.0
		Investment ^2/			1.4	-16.1	33.6	4.4	-2.9	0.8	1.7	2.7	2.1
			Fixed		4.7	-9.5	17.7	-3.8	0.2	1.5	1.8	2.5	2.2
				Private	5.3	-8.9	18.1	-2 3	-0.3	-0.6	1.7	3.0	2.4
				Public	-1.3	-15.3	13.1	-20.4	7.3	0.6	2.3	-3.9	-0.6
			Inventories ^3/		-0.8	-1.7	3.3	2.1	-0.8	-0.1	0.0	0.1	0.0
	Net exports ^3/				-0.2	3.4	-8.8	1.2	1.3	0.1	0.2	0.1	0.0
			Exports		-2.5	-1.2	-1.5	4.1	3.4	2.9	2.6	7.6	75
			Imports		-1 7	-12.8	31.2	-0.5	-1.4	2.4	1.8	2.7	2.4
Consumer prices
	End of period				3.0	3.0	7.2	6.0	4.0	3.0	3.0	3.0	3.0
	Consumer prices (average)				2.3	3.0	4.5	7.5	4.5	3.3	3.0	3 0	3.0
Nominal GDP growth					3.4	2.2	20.2	7.5	5.5	4.8	5.1	5.2	5.3
Potential growth					1.5	-1.8	2.7	2.2	2.0	2.1	2.3	2.4	2.5
Output gap (percent)					-1.3	-5.6	2.7	2.0	0.5	0.0	0.0	0.0	0.0
Balance of Payments					(In percent of GDP)
Current account					-5.2	-1.9	-6.7	-4.5	-3.4	-2.9	-2.7	-2.5	-2.5
Trade balance					1.0	7.3	3.4	4.5	5.6	5.4	5.2	4.7	4.5
Financial account balance					-3.8	-1.2	-10.9	-4.5	3.4	-2.9	-2.7	-2.5	-2.5
	Of which. foreign direct investment (net)				-1.2	-1.0	-0.3	-1.0	-1.2	-1.0	-0.9	-0.9	-1.0
Change in reserves assets					-0.1	-1.1	3.9	0.0	0.0	0.0	0.0	0.0	0.0
Errors and omissions					0.9	-0.5	-0.4	0.0	0.0	0.0	0.0	0.0	0.0
REER (in percent y/y, +=appreciation)					-4.7	-8.2	3.3	...	...	...	...	...	...
					(Annual percentage change)
Total export volume					-2.1	2.6	-0.9	3.5	3.4	2.9	2.6	2.6	2.5
	Of which, copper export volume				-1.1	1.4	-3.2	2.9	3.9	3.5	3.2	3.1	3.1
Total import volume					.-2.1	-10.2	34.8	-0.2	-1.4	2.4	1.8	2.7	2.4
Terms of trade					-1.8	11.6	12.1	-5.7	0.9	0.0	-0.3	-1.2	-0.7
Export prices					-5.9	5.0	29.0	7.2	0.0	-0.3	-0.2	-0.1	0.3
	Copper export price				-7.5	16.0	43.4	5.6	-0.6	-1.4	-1.6	-1.3	-0.5
Import prices					-4.3	-5.9	15.2	13.8	-0.9	-0.2	0.1	1.0	1.0
External Debt					(In percent of GDP)
Gross external debt					66.7	77.9	72.4	74.6	68.8	65.3	62.7	60.9	59.7
	Public				6.2	8.9	12.5	13.7	13.3	12.8	12.4	12.2	12.4
	Private				60.5	69.0	59.9	60.9	55.6	52.5	50.3	48.7	47.3
Gross int. reserves (in billions of U.S. dollars)					40.7	39.2	51.3	51.3	51.3	51.3	51.3	51.3	51.3
Savings and Investment
Gross domestic investment					25.0	21 6	25.3	26.7	25.8	25.6	25.5	25.7	25.6
	Public				2.3	2.0	2.0	1.6	1.7	1.7	1.7	1.7	1.6
	Private				22.7	19.6	23.3	25.1	24.1	23.9	23.8	24.0	24.0
National saving					19.8	19.9	18.7	22.2	22.4	22.7	22.8	23.2	23.1
	Public				-0.4	-5.1	5.5	0.1	1.1	1.4	1.5	1.4	1,4
	Private				20.3	25.1	24.2	22.1	21.2	21.3	21.4	21.8	21.7
Operations of the Central Government
Central government gross debt					28.3	32.6	36.3	38.3	38.4	37.6	37.8	37.9	37.9
Central government debt net of treasury assets					18.6	24.2	31.0	31.8	33.3	32.9	33.5	33.9	33.8
Central government balance					-2.9	-7.3	-7.7	-1.7	-0.7	-0.4	-0.4	-0.4	-0.4
	Total revenue				21.7	20.1	23.9	23.3	23.6	23.8	23.4	23.3	23.1
	Total expenditure				24.6	27.4	31.6	24.9	24.3	24.2	23.8	23.7	23.5
Central government structural balance					-1.7	-2.4	-11.5	-4.4	-2.2	-1.2	-0.7	-0.4	-0.4
Employment					(Annual percentage change. unless otherwise specified)
Working age population					2.2	20	14	1.1	17	17	1.2	1.2	I 7
Labor force					2.0	-B.9	3.4	0.5	0.8	0,9	1.0	1,0	1.0
Employment					2.-	-12.3	5.5	2.5	0.9	0.9	1.0	1.0	1.0
Unemployment rate (in percent)					7.2	10.7	8.8	7.0	6.9	6.8	6.8	6.8	6.8

Sources; Central Bank of Chile, Ministry of Finance, National Statistics Institute, Haver Analytics, and IMF staff calculations and projections.

^{^1/}The annual numbers occasionally show a small discrepancy with the authorities published figures, as they are calculated as the sum of the quarterly series seasonally-adjusted by staff.

^{^2/}Investment is defined as: gross fixed capital formation + changes in inventories.

^{^3/}Contribution to growth.

^{Table 6.}

Chile: Indicators of External Vulnerabilities ^1/

(In percent, unless otherwise specified)

Sources: Central Bank of Chile, Haver Analytics, WEO, and IMF staff calculations.

^{^1/}The annual numbers occasionally show a small discrepancy with the authorities published figures, as they are calculated as the sum of the quarterly series seasonally-adjusted by staff.

^{^2/}Gold valued at end-period market prices.

^{^3/}Includes amortization of medium/long-term debt due during the following year.

^{^4/}Assessing Reserve Adequacy (IMF, 2011 Policy Paper).

^{^5/}Morgan Stanley Capital International Index (Dec/1987 = 100).

^{Table 6.}

Chile: Indicators of External Vulnerabilities ^1/

(In percent, unless otherwise specified)

		2015	2016	2017	2018	2019	2020	2021
Financial Indicators
M3 (percent change)		12.4	8.7	4.8	11.0	10.9	3.1	14.7
	Less pension funds’ deposits (annual percentage change)	13.5	10.1	5.0	12.3	9.7	7.0	18.8
Private sector credit to GDP		82.5	81.6	80.5	83.9	89.0	89.9	82.3
90-day central bank promissory note (nominal) interest rate (avg.)		2.7	3.5	2.6	2.8	3.3	3.4	3.5
Share of foreign currency deposits in total deposits		15.4	15.2	13.0	12.8	14.9	14.8	18.8
Share of foreign currency loans in total credit		13.9	13.0	11.4	11.0	11.8	11.8	10.3
External Indicators
Exports of goods, U.S. dollars (annual percentage change)		-17.4	-2.1	13.4	8.5	-7.9	6.9	28.9
Imports of goods, U.S. dollars (annual percentage change)		-14.7	-4.8	10.1	14.7	-6.5	-16.4	52.6
Terms of trade (annual percentage change)		-2.8	4.1	10.0	-2.5	-1.8	11.6	12.1
REER (annual percent change, period average)		-1.0	1.8	3.4	1.4	-4.7	-8.2	3.3
Exchange rate (pesos per U.S. dollar, period average)		654.1	676.9	648.9	641.2	703.3	792.2	759.1
Current account balance (percent of GDP)		-2.8	-2.6	-2.8	-4.6	-5.2	-1.9	-6.7
Financial account less reserves accumulation (percent of GDP)		-1.7	-2.4	-1.2	-4.3	-3.8	-1.2	-10.9
Gross official reserves (in billions of U.S. dollars) ^2/		38.6	40.5	39,0	39,9	40.7	39.2	51.3
Gross official reserves to M3		14.9	13.5	11.5	11.9	11.7	10.5	14.3
Gross official reserves to short-term external debt ^3/		114.0	114.8	89.1	109.2	91.3	74.3	119.4
Gross official reserves (percent of GDP)		15.9	16.2	14.1	13.5	14.6	15.5	16.2
IMF reserve adequacy metric (percent of GDP) ^4/		14.6	15.3	15.6	14,8	16.9	18.4	16.8
Total external debt (percent of GDP)		65.4	65.6	62.5	59.4	66.7	77.9	72.4
	Of which: External public sector debt	3.2	4.0	4.6	4.9	5.7	8.4	11.4
Total external debt to exports of goods and services		224.8	236.1	221.2	208.9	240.4	248.4	227.8
External interest payments to exports of goods and services		6.2	5.4	7.1	5.8	6.0	8.2	4.7
External amortization payments to exports of goods and services		53.8	50.8	49.5	42.6	55.2	70.1	36.9
Financial Market Indicators
Stock market index (in U.S. dollars; period average) ^5/		1465	1409	1731	1869	1512	1037	1182
Sovereign long-term foreign currency debt rating (end of period)
	Moody’s	Aa3	Aa3	Aa3	A1	A1	A1	A1
	S&P	AA-	AA-	A-	A+	A+	A+	A
	Fitch ratings	A+	A+	A	A	A	A-	A-

Sources: Central Bank of Chile, Haver Analytics, WEO, and IMF staff calculations.

^{^1/}The annual numbers occasionally show a small discrepancy with the authorities published figures, as they are calculated as the sum of the quarterly series seasonally-adjusted by staff.

^{^2/}Gold valued at end-period market prices.

^{^3/}Includes amortization of medium/long-term debt due during the following year.

^{^4/}Assessing Reserve Adequacy (IMF, 2011 Policy Paper).

^{^5/}Morgan Stanley Capital International Index (Dec/1987 = 100).

^{Table 6.}

Chile: Indicators of External Vulnerabilities ^1/

(In percent, unless otherwise specified)

		2015	2016	2017	2018	2019	2020	2021
Financial Indicators
M3 (percent change)		12.4	8.7	4.8	11.0	10.9	3.1	14.7
	Less pension funds’ deposits (annual percentage change)	13.5	10.1	5.0	12.3	9.7	7.0	18.8
Private sector credit to GDP		82.5	81.6	80.5	83.9	89.0	89.9	82.3
90-day central bank promissory note (nominal) interest rate (avg.)		2.7	3.5	2.6	2.8	3.3	3.4	3.5
Share of foreign currency deposits in total deposits		15.4	15.2	13.0	12.8	14.9	14.8	18.8
Share of foreign currency loans in total credit		13.9	13.0	11.4	11.0	11.8	11.8	10.3
External Indicators
Exports of goods, U.S. dollars (annual percentage change)		-17.4	-2.1	13.4	8.5	-7.9	6.9	28.9
Imports of goods, U.S. dollars (annual percentage change)		-14.7	-4.8	10.1	14.7	-6.5	-16.4	52.6
Terms of trade (annual percentage change)		-2.8	4.1	10.0	-2.5	-1.8	11.6	12.1
REER (annual percent change, period average)		-1.0	1.8	3.4	1.4	-4.7	-8.2	3.3
Exchange rate (pesos per U.S. dollar, period average)		654.1	676.9	648.9	641.2	703.3	792.2	759.1
Current account balance (percent of GDP)		-2.8	-2.6	-2.8	-4.6	-5.2	-1.9	-6.7
Financial account less reserves accumulation (percent of GDP)		-1.7	-2.4	-1.2	-4.3	-3.8	-1.2	-10.9
Gross official reserves (in billions of U.S. dollars) ^2/		38.6	40.5	39,0	39,9	40.7	39.2	51.3
Gross official reserves to M3		14.9	13.5	11.5	11.9	11.7	10.5	14.3
Gross official reserves to short-term external debt ^3/		114.0	114.8	89.1	109.2	91.3	74.3	119.4
Gross official reserves (percent of GDP)		15.9	16.2	14.1	13.5	14.6	15.5	16.2
IMF reserve adequacy metric (percent of GDP) ^4/		14.6	15.3	15.6	14,8	16.9	18.4	16.8
Total external debt (percent of GDP)		65.4	65.6	62.5	59.4	66.7	77.9	72.4
	Of which: External public sector debt	3.2	4.0	4.6	4.9	5.7	8.4	11.4
Total external debt to exports of goods and services		224.8	236.1	221.2	208.9	240.4	248.4	227.8
External interest payments to exports of goods and services		6.2	5.4	7.1	5.8	6.0	8.2	4.7
External amortization payments to exports of goods and services		53.8	50.8	49.5	42.6	55.2	70.1	36.9
Financial Market Indicators
Stock market index (in U.S. dollars; period average) ^5/		1465	1409	1731	1869	1512	1037	1182
Sovereign long-term foreign currency debt rating (end of period)
	Moody’s	Aa3	Aa3	Aa3	A1	A1	A1	A1
	S&P	AA-	AA-	A-	A+	A+	A+	A
	Fitch ratings	A+	A+	A	A	A	A-	A-

Sources: Central Bank of Chile, Haver Analytics, WEO, and IMF staff calculations.

^{^1/}The annual numbers occasionally show a small discrepancy with the authorities published figures, as they are calculated as the sum of the quarterly series seasonally-adjusted by staff.

^{^2/}Gold valued at end-period market prices.

^{^3/}Includes amortization of medium/long-term debt due during the following year.

^{^4/}Assessing Reserve Adequacy (IMF, 2011 Policy Paper).

^{^5/}Morgan Stanley Capital International Index (Dec/1987 = 100).

^{Table 7.}

Chile: Financial Soundness Indicators

(In percent, unless otherwise specified)

Sources: IMF Financial Soundness Indicators, Moody’s Investor Service and IMF staff calculations.

^{^1/}As of September 2021.

^{Table 7.}

Chile: Financial Soundness Indicators

(In percent, unless otherwise specified)

		2015	2016	2017	2018	2019	2020	2021 ^1/
Total Assets
	Total assets (In billions of Chilean pesos)	203,609	211,687	220,365	246,266	290,500	323,127	351,920
	Percent of GDP	128.4	125.5	123.0	130.1	148.4	161.5	146.3
Capital Adequacy
	Regulatory Capital to Risk-Weighted Assets	12.6	13.8	13.8	13.3	12.8	14.7	14.3
	Regulatory Tier 1 Capital to Risk-Weighted Assets	9.4	10.9	11.0	10.7	10.3	10.7	10.4
	Capital to Assets	7.6	8.4	8.4	8.4	7.5	6.9	6.6
Credit Risk
	NPLs Net of Provisions to Capital	-3.3	-5.2	4.6	-4.5	4.3	-9.6	-8.2
	NPLs to Gross Loans	1.9	1.8	1.9	1.9	2.1	1.6	1.4
Profitability
	Return on Assets	1.3	1.2	1.3	1.3	1.2	0.5	1.4
	Return on Equity	17.7	13.8	15.4	15.5	16.2	7.8	20.9
	Interest Margin to Gross Income	66.6	66.8	67.1	67.6	67.1	69.4	68.7
	Trading Income to Gross Income	10.6	10.1	8.5	8.7	9.6	8.4	8.5
	Non-interest Expenses to Gross Income	48.6	52.1	51.1	49.3	46.8	54.9	44.8
Liquidity
	Liquid Assets to Total Assets	13.8	14.7	15.3	14.2	15.3	22.2	22.1
FX and Derivative Risk
	FX Loans to Total Loans	20.0	18.2	16.6	18.4	18.9	16.1	17.3
	FX Liabilities to Total Liabilities	27.1	25.8	24.0	25.5	26.7	22.7	25.2

Sources: IMF Financial Soundness Indicators, Moody’s Investor Service and IMF staff calculations.

^{^1/}As of September 2021.

^{Table 7.}

Chile: Financial Soundness Indicators

(In percent, unless otherwise specified)

		2015	2016	2017	2018	2019	2020	2021 ^1/
Total Assets
	Total assets (In billions of Chilean pesos)	203,609	211,687	220,365	246,266	290,500	323,127	351,920
	Percent of GDP	128.4	125.5	123.0	130.1	148.4	161.5	146.3
Capital Adequacy
	Regulatory Capital to Risk-Weighted Assets	12.6	13.8	13.8	13.3	12.8	14.7	14.3
	Regulatory Tier 1 Capital to Risk-Weighted Assets	9.4	10.9	11.0	10.7	10.3	10.7	10.4
	Capital to Assets	7.6	8.4	8.4	8.4	7.5	6.9	6.6
Credit Risk
	NPLs Net of Provisions to Capital	-3.3	-5.2	4.6	-4.5	4.3	-9.6	-8.2
	NPLs to Gross Loans	1.9	1.8	1.9	1.9	2.1	1.6	1.4
Profitability
	Return on Assets	1.3	1.2	1.3	1.3	1.2	0.5	1.4
	Return on Equity	17.7	13.8	15.4	15.5	16.2	7.8	20.9
	Interest Margin to Gross Income	66.6	66.8	67.1	67.6	67.1	69.4	68.7
	Trading Income to Gross Income	10.6	10.1	8.5	8.7	9.6	8.4	8.5
	Non-interest Expenses to Gross Income	48.6	52.1	51.1	49.3	46.8	54.9	44.8
Liquidity
	Liquid Assets to Total Assets	13.8	14.7	15.3	14.2	15.3	22.2	22.1
FX and Derivative Risk
	FX Loans to Total Loans	20.0	18.2	16.6	18.4	18.9	16.1	17.3
	FX Liabilities to Total Liabilities	27.1	25.8	24.0	25.5	26.7	22.7	25.2

Sources: IMF Financial Soundness Indicators, Moody’s Investor Service and IMF staff calculations.

^{^1/}As of September 2021.

Annex I. External Debt Sustainability Analysis

External debt decreased to 72 percent of GDP in 2021, partly due to exchange rate valuation effects and higher growth, and is projected to further decline towards 60 percent of GDP by 2027. External debt remains sustainable under a wide range of adverse scenarios, including shocks to interest rates, growth, and the exchange rate. The non-financial corporate sector appears highly leveraged, but most debt is FDI-related (with parent companies) and has foreign exchange hedging or long maturity.

^{Table 1.}

Chile: External Debt Sustainability Framework

(in percent of GDP, otherwise indicated)

^{^1/}Derived as [r – g – r(1+g) + ea(1+r)]/(1+g+r+gr) times previous period debt stock, with r = nominal effective interest rate on external debt; r = change in domestic GDP deflator in US dollar terms, g = real GD P growth rate, e = nominal appreciation (increase in dollar value of domestic currency), and a = share of domestic-currency denominated debt in total external debt.

^{^2/}The contribution from price and exchange rate changes is defined as [-r(1+g) + ea(1+r)]/(1+g+r+gr) times previous period debt stock. r increases with an appreciating domestic currency (e > 0) and rising inflation (based on GDP deflator) .

^{^3/}For projection, line includes the impact of price and exchange rate changes.

^{^4/}Defined as current account deficit, plus amortization on medium- and long-term debt, plus short-term debt at end of previous period.

^{^5/}The key variables include real GDP growth; nominal interest rate; dollar deflator growth; and both non-interest current account and non-debt inflows in percent of GDP.

^{^6/}Long-run, constant balance that stabilizes the debt ratio assuming that key variables (real GD P growth, nominal interest rate, dollar deflator growth, and non-debt inflows in percent of GDP) remain at their levels of the last projection year.

^{Table 1.}

Chile: External Debt Sustainability Framework

(in percent of GDP, otherwise indicated)

					Actual							Projections
					2017	2018	2019	2020	2021			2022	2023	2024	2025	2026	2027	Debt-stabilizing non-interest current account ^6/
1	Baseline: External debt				62.5	59.4	66.7	77.9	72.4			74.5	68.8	65.3	62.7	60.9	59.6	-1.6
2	Change in external debt				-3.1	-3.1	7.3	11.2	-5.5			2.1	-5.7	-3.5	-2.6	-1.8	-1.2
3	Identified external debt-creating flows (4+8+9)				-2.3	3.4	8.0	9.2	-9.7			3.9	3.8	2.2	1.7	1.4	1.6
4		Current account deficit, excluding interest payments			1.0	2.9	3.3	-0.3	5.2			2.6	2.0	1.5	1.0	1.0	1.2
5			Balance of goods and services		0.7	-1.1	-1.9	4.4	-0.4			0.4	2.0	1.9	2.0	1.6	1.4
6				Exports	28.3	28.4	27.7	31.4	31.8			36.9	34.3	32.5	31.1	30.0	29.2
7				Imports	-27.6	-29.5	-29.6	-27.0	-32.2			-36.4	-32.3	-30.6	-29.0	-28.4	-27.8
8		Net non-debt creating capital inflows (negative)			1.2	2.9	-0.6	0.8	-0.8			0.5	0.7	0.4	0.4	0.4	0.5
9		Automatic debt dynamics ^1/			-4.4	-2.3	5.3	8.7	-14.1			0.8	1.1	0.3	0.3	0.0	-0.1
10			Contribution from nominal interest rate		1.8	1.7	1.9	2.2	1.5			1.9	1.4	1.4	1.6	1.4	1.3
11			Contribution from real GDP growth		-0.8	-2.3	-0.5	4.5	-7.3			-1.1	-0.3	-1.1	-1.4	-1.5	-1.4
12			Contribution from price and exchange rate changes ^2/		-5.5	-1.7	3.9	2.0	-8.3
13	Residual, incl. change in gross foreign assets (2–3) ^3/				-0.8	-6.5	-0.7	2.0	4.3			-1.8	-9.5	-5.7	-4.3	-3.2	-2.8
	External debt-to-exports ratio (in percent)				221.2	208.9	240.4	248.4	227.8			202.2	200.4	200.7	201.8	202.8	204.5
	Gross external financing need (in billions of US dollars) ^4/				37.3	66.7	71.9	53.8	67.8			85.5	54.0	52.1	49.1	50.3	52.7
		in percent of GDP			13.5	22.6	25.8	21.3	21.4	10-Year	10-Year	26.9	15.4	13.7	12.1	11.7	11.5
	Scenario with key variables at their historical averages ^5/											74.5	73.9	74.4	75.2	76.3	77.6	0.1
	Key Macroeconomic Assumptions Underlying Baseline									Historical Average	Standard Deviation
	Real GDP growth (in percent)				1.3	4.0	0.8	-6.1	11.7	2.6	4.4	1.5	0.5	1.7	2.2	2.5	2.5
	GDP deflator in US dollars (change in percent)				9.4	2.8	-6.5	-3.4	12.2	0.0	7.0	-1.2	10.0	6.2	4.8	3.7	3.4
	Nominal external interest rate (in percent)				3.1	2.8	3.0	3.0	2.4	2.9	0.3	2.6	2.1	2.1	2.7	2.4	2.2
	Growth of exports (US dollar terms, in percent)				12.6	7.6	-8.0	2.5	27.2	1.3	12.2	16.3	2.9	2.3	2.3	2.7	3.0
	Growth of imports (US dollar terms, in percent)				9.1	14.2	-5.3	-17.4	49.8	3.1	19.1	13.6	-2.0	2.2	1.7	4.0	3.6
	Current account balance, excluding interest payments				-1.0	-2.9	-3.3	0.3	-5.2	-2.3	1.7	-2.6	-2.0	-1.5	-1.0	-1.0	-1.2
	Net non-debt creating capital inflows				-1.2	-2.9	0.6	-0.8	0.8	0.2	1.8	-0.5	-0.7	-0.4	-0.4	-0.4	-0.5

^{^3/}For projection, line includes the impact of price and exchange rate changes.

^{^4/}Defined as current account deficit, plus amortization on medium- and long-term debt, plus short-term debt at end of previous period.

^{^5/}The key variables include real GDP growth; nominal interest rate; dollar deflator growth; and both non-interest current account and non-debt inflows in percent of GDP.

^{Table 1.}

Chile: External Debt Sustainability Framework

(in percent of GDP, otherwise indicated)

					Actual							Projections
					2017	2018	2019	2020	2021			2022	2023	2024	2025	2026	2027	Debt-stabilizing non-interest current account ^6/
1	Baseline: External debt				62.5	59.4	66.7	77.9	72.4			74.5	68.8	65.3	62.7	60.9	59.6	-1.6
2	Change in external debt				-3.1	-3.1	7.3	11.2	-5.5			2.1	-5.7	-3.5	-2.6	-1.8	-1.2
3	Identified external debt-creating flows (4+8+9)				-2.3	3.4	8.0	9.2	-9.7			3.9	3.8	2.2	1.7	1.4	1.6
4		Current account deficit, excluding interest payments			1.0	2.9	3.3	-0.3	5.2			2.6	2.0	1.5	1.0	1.0	1.2
5			Balance of goods and services		0.7	-1.1	-1.9	4.4	-0.4			0.4	2.0	1.9	2.0	1.6	1.4
6				Exports	28.3	28.4	27.7	31.4	31.8			36.9	34.3	32.5	31.1	30.0	29.2
7				Imports	-27.6	-29.5	-29.6	-27.0	-32.2			-36.4	-32.3	-30.6	-29.0	-28.4	-27.8
8		Net non-debt creating capital inflows (negative)			1.2	2.9	-0.6	0.8	-0.8			0.5	0.7	0.4	0.4	0.4	0.5
9		Automatic debt dynamics ^1/			-4.4	-2.3	5.3	8.7	-14.1			0.8	1.1	0.3	0.3	0.0	-0.1
10			Contribution from nominal interest rate		1.8	1.7	1.9	2.2	1.5			1.9	1.4	1.4	1.6	1.4	1.3
11			Contribution from real GDP growth		-0.8	-2.3	-0.5	4.5	-7.3			-1.1	-0.3	-1.1	-1.4	-1.5	-1.4
12			Contribution from price and exchange rate changes ^2/		-5.5	-1.7	3.9	2.0	-8.3
13	Residual, incl. change in gross foreign assets (2–3) ^3/				-0.8	-6.5	-0.7	2.0	4.3			-1.8	-9.5	-5.7	-4.3	-3.2	-2.8
	External debt-to-exports ratio (in percent)				221.2	208.9	240.4	248.4	227.8			202.2	200.4	200.7	201.8	202.8	204.5
	Gross external financing need (in billions of US dollars) ^4/				37.3	66.7	71.9	53.8	67.8			85.5	54.0	52.1	49.1	50.3	52.7
		in percent of GDP			13.5	22.6	25.8	21.3	21.4	10-Year	10-Year	26.9	15.4	13.7	12.1	11.7	11.5
	Scenario with key variables at their historical averages ^5/											74.5	73.9	74.4	75.2	76.3	77.6	0.1
	Key Macroeconomic Assumptions Underlying Baseline									Historical Average	Standard Deviation
	Real GDP growth (in percent)				1.3	4.0	0.8	-6.1	11.7	2.6	4.4	1.5	0.5	1.7	2.2	2.5	2.5
	GDP deflator in US dollars (change in percent)				9.4	2.8	-6.5	-3.4	12.2	0.0	7.0	-1.2	10.0	6.2	4.8	3.7	3.4
	Nominal external interest rate (in percent)				3.1	2.8	3.0	3.0	2.4	2.9	0.3	2.6	2.1	2.1	2.7	2.4	2.2
	Growth of exports (US dollar terms, in percent)				12.6	7.6	-8.0	2.5	27.2	1.3	12.2	16.3	2.9	2.3	2.3	2.7	3.0
	Growth of imports (US dollar terms, in percent)				9.1	14.2	-5.3	-17.4	49.8	3.1	19.1	13.6	-2.0	2.2	1.7	4.0	3.6
	Current account balance, excluding interest payments				-1.0	-2.9	-3.3	0.3	-5.2	-2.3	1.7	-2.6	-2.0	-1.5	-1.0	-1.0	-1.2
	Net non-debt creating capital inflows				-1.2	-2.9	0.6	-0.8	0.8	0.2	1.8	-0.5	-0.7	-0.4	-0.4	-0.4	-0.5

^{^3/}For projection, line includes the impact of price and exchange rate changes.

^{^4/}Defined as current account deficit, plus amortization on medium- and long-term debt, plus short-term debt at end of previous period.

^{^5/}The key variables include real GDP growth; nominal interest rate; dollar deflator growth; and both non-interest current account and non-debt inflows in percent of GDP.

Annex II. Public Sector Debt Sustainability Analysis

Public sector debt is sustainable under a wide range of plausible shock scenarios. Medium-term structural fiscal consolidation plans, guided by the structural fiscal balance rule, are fully consistent with fiscal sustainability. The authorities are aiming for an ambitious tax reform, not included in baseline scenario, to finance demands for higher social spending.

See Chile -2021 Article IV Consultation- IMF Country Report 21/83.

Newly released external (and national) accounts resulted in substantial revisions to the current account deficit in recent years, reflecting new sources of information, methodological updates, and rebasing to 2018.

The LA5 group comprises Brazil, Chile, Colombia,Mexico,and Peru.

The BCCh is also smoothly unwinding the unconventional liquidity measures. The stock of acquired assets has been gradually decreasing since June 2021 upon their expiration.

SDRs allocated to Chile amounted to US$2.4 billion, of which US$0.6 billion were used as a capital contribution to the Latin American Reserve Fund (FLAR) and the remainder was kept in international reserves.

For additional details on the PBOC swap facility, see IMF Country Report No. 21/92.

This facility provides, at a backstop rate, an alternative temporary source of U.S. dollars for foreign official holders of Treasury securities other than open market sales of securities.

The decline benefited from the use of pension withdrawals by households to cancel debt, as regulatory for bearance expired in mid-2021.

On May 3 the new administration published its first quarterly fiscal report, which affirmed its intention to pursue a fiscal consolidation that would stabilize the gross public debt ratio below45 percent of GDP. Staff’s baseline projections currently assume that debt stabilizes below that level with some margin, pending further information on the government’s expenditure and tax reform plans.

The government plans to submit the tax reform to congress by mid-year, aiming to gradually raise about 4 percent of GDP over the next few years. Potential revenue gains are not included in the projections.

See IMF Country Report No. 21/83. Per the 2018 FCL Operational Guidance Note, the core indicator for staff’s assessment of external sustainability requires the member’s external position to have been assessed, in the most recent Board document (Article IV or ESR), as “broadly consistent”, “moderately stronger (weaker)”, “stronger”, or “substantially stronger” than implied by fundamentals and desirable policies.

Chile’s external position improved, notwithstanding the liquidation of external assets from pension funds to enable the pension withdrawals, due to valuation effects and new inflows into the pension system.

For this particular indicator, the 2018 FCL Operational Guidance Note states that public flows should account for less than half of a member’s direct, portfolio, and other asset and liability flows, on average in the past three years. In addition to the composition of recent capital flows, an assessment of the international investment position is also relevant.

See IMF Country Report No. 21/83 for further details.

Its foreign-currency ratings are A1 for Moody’s, A for S&P, and A- for Fitch, after downgrades from S$x0026;P in April 2020, and from Fitch in March 2020.

Chile is classified as a mature market economy for reserve assessment purposes in IMF (2015) “Assessing Reserve Adequacy-Specific Proposals” and IMF (2016) “Guidance Note on the Assessment of Reserve Adequacy and Related Considerations.”

Although banks’ external debt was US$29.7 billion at end-2021, a sizable portion is covered by the liquid segment of banks’ US$30.1 billion in foreign assets. By regulation, banks’ short FX positions due in thirty days cannot exceed long positions by more than the bank’s capital. In the non-bank part of the financial system, institutional investors (i.e., pension funds) have a positive net foreign asset position.

Reserve coverage of prospective imports is more than twice the standard benchmark at six months, while coverage of broad money and short-term external debt (remaining maturity) exceed benchmarks at 24.2 and 143 percent, respectively.

See IMF Country Report No. 21/241 for further details.

See IMF Country Report No. 21/113 for further details.

For a full explanation of this special balance o f payment need, see Policy Paper No. 20/025.

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Chile: Proposal for an Arrangement Under the Short-Term Liquidity Line-Press Release; Staff Report; and Statement by the Executive Director for Chile

Author:

International Monetary Fund. Western Hemisphere Dept.

Volume/Issue:: Volume 2022: Issue 148

Publisher:: International Monetary Fund

ISBN:: 9798400211027

ISSN:: 1934-7685

Pages:: 43

DOI:: https://doi.org/10.5089/9798400211027.002

Keywords
Context
Recent Developments
Policies, Outlook, and Risks
Qualification
Rationale for SLL Proposal and Access Considerations
Safeguards
Staff Appraisal
Annex I. External Debt Sustainability Analysis
Annex II. Public Sector Debt Sustainability Analysis

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Chile: IMACEC by Sector

(February 2020=100, SA)

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Chile: Cumulative Total Portfolio Flows in Weeks

(In US$ billions)

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Chile: Peso Government Bond Yields

(In percent)

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Chile: NEER ^1/

(1/1/2019=100)

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Chile: Inflation and Monetary Policy Rate

(In percent, yoy)

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Chile: Capital Adequacy Ratio and NPL Ratio

(In Percent)

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Chile: Net International Investment Position, 2021 ^1/

(In percent of GDP)

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Chile: Gross Outflows by Institution

(In US$ billions, 12-month moving average)

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Chile: Gross Inflows by Institution

(In US$ billions, 12-month moving average)

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Chile: Government Debt and EMBI Spreads

(In US$ billions and basis points)

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Chile: ARA Metric Decomposition and Reserves

(In US$ billions)

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Chile: Fiscal Balances, Gross Debt, and Net Debt

(In percent of GDP)

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Chile: Headline Inflation and Inflation Expectations ^1/

(In percent, yoy)

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Chile: Net Portfolio Flows

(In percent of quota,-=outflows)

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Chile: Exchange Rate Stress Index

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^{Figure 1.}

Chile: Peak Fund Exposure and Debt Service Ratios for Recent Exceptional Access Cases ^1/ ^2/

(Exceptional Access cases since September 2008)

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^{Figure 2.}

Chile: COVID-19 Developments

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^{Figure 3.}

Chile: Financial Comparison with LA5 and Other EMEs ^1/

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^{Figure 4.}

Chile: Portfolio Flows and International Reserves

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^{Figure 5.}

Chile: Economic Activity

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^{Figure 6.}

Chile: External Sector

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^{Figure 7.}

Chile: Financial Sector

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^{Figure 1.}

Chile: External Debt Sustainability: Bound Tests ^1/ ^2/

(External debt in percent of GDP)

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^{Figure 1.}

Chile: Baseline Scenario

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^{Figure 2.}

Chile: Composition of Public Debt and Alternative Scenarios

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^{Figure 3.}

Chile: Macro-Fiscal Stress Tests

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^{Figure 4.}

Chile: Risk Assessment

Foresee

^{Table 1.}

Chile: External Debt Sustainability Framework

(in percent of GDP, otherwise indicated)

					Actual							Projections
					2017	2018	2019	2020	2021			2022	2023	2024	2025	2026	2027	Debt-stabilizing non-interest current account ^6/
1	Baseline: External debt				62.5	59.4	66.7	77.9	72.4			74.5	68.8	65.3	62.7	60.9	59.6	-1.6
2	Change in external debt				-3.1	-3.1	7.3	11.2	-5.5			2.1	-5.7	-3.5	-2.6	-1.8	-1.2
3	Identified external debt-creating flows (4+8+9)				-2.3	3.4	8.0	9.2	-9.7			3.9	3.8	2.2	1.7	1.4	1.6
4		Current account deficit, excluding interest payments			1.0	2.9	3.3	-0.3	5.2			2.6	2.0	1.5	1.0	1.0	1.2
5			Balance of goods and services		0.7	-1.1	-1.9	4.4	-0.4			0.4	2.0	1.9	2.0	1.6	1.4
6				Exports	28.3	28.4	27.7	31.4	31.8			36.9	34.3	32.5	31.1	30.0	29.2
7				Imports	-27.6	-29.5	-29.6	-27.0	-32.2			-36.4	-32.3	-30.6	-29.0	-28.4	-27.8
8		Net non-debt creating capital inflows (negative)			1.2	2.9	-0.6	0.8	-0.8			0.5	0.7	0.4	0.4	0.4	0.5
9		Automatic debt dynamics ^1/			-4.4	-2.3	5.3	8.7	-14.1			0.8	1.1	0.3	0.3	0.0	-0.1
10			Contribution from nominal interest rate		1.8	1.7	1.9	2.2	1.5			1.9	1.4	1.4	1.6	1.4	1.3
11			Contribution from real GDP growth		-0.8	-2.3	-0.5	4.5	-7.3			-1.1	-0.3	-1.1	-1.4	-1.5	-1.4
12			Contribution from price and exchange rate changes ^2/		-5.5	-1.7	3.9	2.0	-8.3
13	Residual, incl. change in gross foreign assets (2–3) ^3/				-0.8	-6.5	-0.7	2.0	4.3			-1.8	-9.5	-5.7	-4.3	-3.2	-2.8
	External debt-to-exports ratio (in percent)				221.2	208.9	240.4	248.4	227.8			202.2	200.4	200.7	201.8	202.8	204.5
	Gross external financing need (in billions of US dollars) ^4/				37.3	66.7	71.9	53.8	67.8			85.5	54.0	52.1	49.1	50.3	52.7
		in percent of GDP			13.5	22.6	25.8	21.3	21.4	10-Year	10-Year	26.9	15.4	13.7	12.1	11.7	11.5
	Scenario with key variables at their historical averages ^5/											74.5	73.9	74.4	75.2	76.3	77.6	0.1
	Key Macroeconomic Assumptions Underlying Baseline									Historical Average	Standard Deviation
	Real GDP growth (in percent)				1.3	4.0	0.8	-6.1	11.7	2.6	4.4	1.5	0.5	1.7	2.2	2.5	2.5
	GDP deflator in US dollars (change in percent)				9.4	2.8	-6.5	-3.4	12.2	0.0	7.0	-1.2	10.0	6.2	4.8	3.7	3.4
	Nominal external interest rate (in percent)				3.1	2.8	3.0	3.0	2.4	2.9	0.3	2.6	2.1	2.1	2.7	2.4	2.2
	Growth of exports (US dollar terms, in percent)				12.6	7.6	-8.0	2.5	27.2	1.3	12.2	16.3	2.9	2.3	2.3	2.7	3.0
	Growth of imports (US dollar terms, in percent)				9.1	14.2	-5.3	-17.4	49.8	3.1	19.1	13.6	-2.0	2.2	1.7	4.0	3.6
	Current account balance, excluding interest payments				-1.0	-2.9	-3.3	0.3	-5.2	-2.3	1.7	-2.6	-2.0	-1.5	-1.0	-1.0	-1.2
	Net non-debt creating capital inflows				-1.2	-2.9	0.6	-0.8	0.8	0.2	1.8	-0.5	-0.7	-0.4	-0.4	-0.4	-0.5

^{^3/}For projection, line includes the impact of price and exchange rate changes.

^{^4/}Defined as current account deficit, plus amortization on medium- and long-term debt, plus short-term debt at end of previous period.

^{^5/}The key variables include real GDP growth; nominal interest rate; dollar deflator growth; and both non-interest current account and non-debt inflows in percent of GDP.

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Abstract

Context

Recent Developments

Policies, Outlook, and Risks

Qualification

Rationale for SLL Proposal and Access Considerations

Safeguards

Staff Appraisal

Annex I. External Debt Sustainability Analysis

Annex II. Public Sector Debt Sustainability Analysis

Same Series

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