Economic Buzz: IMF expects Chile?s economic growth to rebound next year, highlights higher Copper demand from energy transition

International Monetary Fund or IMF stated in a latest update that Chile?s economic activity moderated in the first half of 2026, while inflation rose because of the conflict in the Middle East. GDP growth was affected by supply-side factors related to natural resources and the deceleration of domestic demand during the second quarter. The growth rate of gross fixed capital formation slowed more than anticipated; however, the latest Capital Goods Corporation survey continues to point to a favorable outlook for investment projects in 2026?2030, with the increase concentrated from 2027 onward. Consumption was less dynamic than earlier in the year, reflecting the deterioration of its underlying fundamentals. These developments confirm the downward revision in GDP growth forecasts presented in the latest Monetary Policy Report (IPoM) of 1.0?1.75 percent for 2026, while a rebound of 2.0-3.0 percent is expected for 2027. In addition, high copper prices, supported by strong demand linked to artificial intelligence, the energy transition, and increased defense spending, contributed to a current account surplus. The fund noted higher copper prices amid structurally higher demand from the energy transition, AI-related infrastructure growth, and defense spending.

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