Commodities Buzz: IMF expects higher copper prices to support Chile's economic growth

The Executive Board of the International Monetary Fund (IMF) completed the Article IV Consultation for Chile. It noted that economic activity has remained robust in the country, with GDP growing at 2.5 percent in 2025 driven by strong non‑mining domestic demand. Inflation declined to the central bank’s target in early 2026 but has since increased due to higher energy prices associated with the conflict in the Middle East. Fiscal deficits have persisted due to revenue underperformance, but public debt remains moderate. The financial system is sound overall, although vulnerabilities persist in construction and real estate.

GDP growth is expected to soften to 1.8 percent in 2026, rising to 2.6 percent in 2027 supported by higher copper prices. Inflation is expected to remain temporarily above target in 2026 and early 2027 before converging back to target. The implementation of announced fiscal consolidation measures should help gradually narrow the fiscal deficit over the medium term. However, achieving the government’s objective of reaching structural balance by 2030 and keeping the debt-to-GDP ratio below 45 percent will require additional fiscal efforts. The external position is expected to remain broadly in line with medium‑term fundamentals.

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