Chile Economy 2008

Economy - overview:
Chile has a market-oriented economy characterized by a high level of foreign trade. During the early 1990s, Chile's reputation as a role model for economic reform was strengthened when the democratic government of Patricio AYLWIN - which took over from the military in 1990 - deepened the economic reform initiated by the military government. Growth in real GDP averaged 8% during 1991-97, but fell to half that level in 1998 because of tight monetary policies implemented to keep the current account deficit in check and because of lower export earnings - the latter a product of the global financial crisis. A severe drought exacerbated the recession in 1999, reducing crop yields and causing hydroelectric shortfalls and electricity rationing, and Chile experienced negative economic growth for the first time in more than 15 years. Despite the effects of the recession, Chile maintained its reputation for strong financial institutions and sound policy that have given it the strongest sovereign bond rating in South America. Between 2000 and 2007 growth ranged between 2%-6%. Throughout these years Chile maintained a low rate of inflation with GDP growth coming from high copper prices, solid export earnings (particularly forestry, fishing, and mining), and growing domestic consumption. President BACHELET in 2006 established an Economic and Social Stabilization Fund to hold excess copper revenues so that social spending can be maintained during periods of copper shortfalls. This fund will surpass $20 billion by the end of 2007. Chile continues to attract foreign direct investment, but most foreign investment goes into gas, water, electricity and mining. Unemployment has exhibited a downward trend over the past two years, dropping to 7.8% and 6.7% at the end of 2006 and 2007, respectively. Chile deepened its longstanding commitment to trade liberalization with the signing of a free trade agreement with the US, which took effect on 1 January 2004. Chile claims to have more bilateral or regional trade agreements than any other country. It has 57 such agreements (not all of them full free trade agreements), including with the European Union, Mercosur, China, India, South Korea, and Mexico.

GDP (purchasing power parity):
$234.4 billion (2007 est.)

GDP (official exchange rate):
$107.7 billion (2007 est.)

GDP - real growth rate:
5.2% (2007 est.)

GDP - per capita (PPP):
$14,400 (2007 est.)

GDP - composition by sector:
agriculture: 4.9%
industry: 49.7%
services: 45.4% (2007 est.)

Labor force:
6.97 million (2007 est.)

Labor force - by occupation:
agriculture: 13.6%
industry: 23.4%
services: 63% (2003)

Unemployment rate:
7% (2007 est.)

Population below poverty line:
18.2% (2005)

Household income or consumption by percentage share:
lowest 10%: 1.4%
highest 10%: 45% (2003)

Distribution of family income - Gini index:
54.9 (2003)

Inflation rate (consumer prices):
6.5% (2007 est.)

Investment (gross fixed):
21% of GDP (2007 est.)

Budget:
revenues: $44.44 billion
expenditures: $31.36 billion (2007 est.)

Public debt:
3.6% of GDP (2007 est.)

Agriculture - products:
grapes, apples, pears, onions, wheat, corn, oats, peaches, garlic, asparagus, beans; beef, poultry, wool; fish; timber

Industries:
copper, other minerals, foodstuffs, fish processing, iron and steel, wood and wood products, transport equipment, cement, textiles

Industrial production growth rate:
5.6% (2007 est.)

Electricity - production:
47.6 billion kWh (2006)

Electricity - consumption:
48.31 billion kWh (2005)

Electricity - exports:
0 kWh (2005)

Electricity - imports:
2.152 billion kWh (2005)

Oil - production:
15,100 bbl/day (2006 est.)

Oil - consumption:
238,000 bbl/day (2006 est.)

Oil - exports:
31,510 bbl/day (2004)

Oil - imports:
222,900 bbl/day (2006 est.)

Oil - proved reserves:
150 million bbl (1 January 2006 est.)

natural gas - production:
1.957 billion cu m (2005 est.)

natural gas - consumption:
8.191 billion cu m (2005 est.)

natural gas - exports:
0 cu m (2005 est.)

natural gas - imports:
6.234 billion cu m (2005)

natural gas - proved reserves:
93.97 billion cu m (1 January 2006 est.)

Current account balance:
$8.184 billion (2007 est.)

Exports:
$66.43 billion f.o.b. (2007 est.)

Exports - commodities:
copper, fruit, fish products, paper and pulp, chemicals, wine

Exports - partners:
US 15.6%, Japan 10.5%, China 8.6%, Netherlands 6.7%, South Korea 5.9%, Italy 4.9%, Brazil 4.8%, France 4.2% (2006)

Imports:
$41.8 billion f.o.b. (2007 est.)

Imports - partners:
US 15.6%, Argentina 12.6%, Brazil 11.8%, China 9.7% (2006)

Economic aid - recipient:
$0 (2006)

Reserves of foreign exchange and gold:
$22.24 billion (31 December 2007 est.)

Debt - external:
$49.18 billion (30 June 2007)

Stock of direct foreign investment - at home:
$84.07 billion (2006 est.)

Stock of direct foreign investment - abroad:
$28.5 billion (2006 est.)

Market value of publicly traded shares:
$174.6 billion (2006)

Currency (code):
Chilean peso (CLP)

Exchange rates:
Chilean pesos per US dollar - 526.25 (2007), 530.29 (2006), 560.09 (2005), 609.37 (2004), 691.43 (2003)