Chile‘s exports reached a year-on-year growth of 28.9% in 2021, to 94,705 million dollars, reported the Central Bank of Chile.
As for imports, they climbed 52.1%, at an annual rate, to reach 83,806 million dollars.
Therefore, Chile registered a surplus of 10,899 million dollars in its trade balance, a lower amount compared to the positive balance of 18,369 million in 2020.
Chile’s economic growth has been fueled by buoyant private consumption in 2021 thanks to fiscal expansion, pension fund withdrawals and loosened mobility restrictions.
At the same time, according to the OECD, high copper prices and measures to speed up private investment projects have boosted fixed investment.
Without reforms to improve productivity, the OECD expects growth to slow during 2022 and 2023 as fiscal support and accumulated savings and liquidity from pension fund withdrawals fade, financial conditions tighten and High uncertainty depresses investment.
It also projects that employment will continue to recover at a slower pace with pre-pandemic levels recovered only in early 2023.
Inflation will converge to the 3% target in early 2023 as domestic activity slows. Downside risks to the outlook include more persistent inflation and an overheating economy.
Chilean exports
A stronger than expected adjustment in China‘s construction sector could reduce copper prices and exports.
OECD projections consider that a fourth wave of extraordinary withdrawals from pension funds would further reduce old-age pensions that are already low, increase inequality and force pension funds to liquidate assets, further reducing the rate of pensions. savings and exacerbating the already observed negative effects on financial stability.
In addition, the short-term demand boost will exacerbate overheating in the economy.
Upside risks to growth include a faster resolution of international supply bottlenecks and a further materialization of pent-up demand.
Chile’s exports include: copper, fish fillets, forest products, wine, fruit and iron ore.
Conversely, among its imports stand out: petroleum oils, crude oil, telephones, gas, automobiles, computers and medicines.
