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The Economy of Chile

Chilean Economy

Chile's map

Economy - overview: Chile has a market-oriented economy characterized by a high level of foreign trade and a reputation for strong financial institutions and sound policy that have given it the strongest sovereign bond rating in South America. Exports account for 40% of GDP, with commodities making up some three-quarters of total exports. Copper alone provides one-third of government revenue. 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 situation 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. In the years since then, growth has averaged 4% per year. 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. Over the past five years, foreign direct investment inflows have quadrupled to some $17 billion in 2008. The Chilean government conducts a rule-based countercyclical fiscal policy, accumulating surpluses in sovereign wealth funds during periods of high copper prices and economic growth, and allowing deficit spending only during periods of low copper prices and growth. As of September 2008, those sovereign wealth funds - kept mostly outside the country and separate from Central Bank reserves - amounted to more than $20 billion.

GDP:

GDP - real growth rate: 4% (2008 est.) 5.1% (2007 est.) 4.3% (2006 est.)

GDP - per capita:

GDP - composition by sector: agriculture: 4.8% industry: 50.5% services: 44.7% (2008 est.)

Population below poverty line:

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):

Labor force: 7.32 million (2008 est.)

Labor force - by occupation: agriculture: 13.2% industry: 23% services: 63.9% (2005)

Unemployment rate: 7.5% (August-October 2008)

Budget: revenues: $46.5 billion expenditures: $37.7 billion (2008 est.)

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

Industrial production growth rate: 1.7% (2008 est.)

Electricity - production: 50.37 billion kWh (2006 est.)

Electricity - production by source:

Electricity - consumption: 45.52 billion kWh (2006 est.)

Electricity - exports: 0 kWh (2007 est.)

Electricity - imports: 1.628 billion kWh (2007 est.)

Oil - production: 11,610 bbl/day (2007 est.)

Oil - consumption: 253,000 bbl/day (2006 est.)

Oil - exports: 32,500 bbl/day (2005)

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

Oil - proved reserves: 150 million bbl (1 January 2008 est.)

Natural gas - production: 1.8 billion cu m (2007 est.)

Natural gas - consumption: 4.2 billion cu m (2007 est.)

Natural gas - exports: 0 cu m (2007 est.)

Natural gas - imports: 2.4 billion cu m (2007 est.)

Natural gas - proved reserves: 97.97 billion cu m (1 January 2008 est.)

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

Exports: $69.1 billion f.o.b. (2008 est.)

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

Exports - partners: China 14.8%, US 12.5%, Japan 10.5%, Netherlands 5.8%, South Korea 5.7%, Italy 5.1%, Brazil 5% (2007)

Imports: $59.17 billion f.o.b. (2008 est.)

Imports - commodities: petroleum and petroleum products, chemicals, electrical and telecommunications equipment, industrial machinery, vehicles, natural gas

Imports - partners: US 16.7%, China 11.2%, Brazil 10.3%, Argentina 9.9% (2007)

Debt - external: $64.57 billion (31 December 2008 est.)

Economic aid - recipient:

Currency:

Currency code:

Exchange rates: Chilean pesos (CLP) per US dollar - 509.02 (2008 est.), 526.25 (2007), 530.29 (2006), 560.09 (2005), 609.37 (2004)

Fiscal year: