Key View

• Risks to Chile’s investor-friendly economic model have continued to fade in recent months, in line with our view.
• Leftist President Gabriel Boric’s agenda is stalled in Congress, and the ongoing constitutional rewrite appears likely to produce a document that will be rejected, keeping the status quo intact.
• Given reduced risk of

Key View

• We have further lowered our forecast for Chile’s current account deficit from 5.0% of GDP to 3.5% in 2023, marking a significant improvement compared to a record 9.0% in 2022.
• This improvement will be driven primarily be a drop in goods and services imports, though we note that the rate of decline in imports will likely moderate in

Key View

• After Q123 real GDP growth surprised to the upside, we have boosted our 2023 real GDP growth forecast for Chile from -0.8% to -0.1%.
• The economy will rebound over H223 as borrowing costs and inflation come down, while political developments should support investor confidence.
• Risks to our forecast lie in both directions depending on

Key View

• Chile’s recently announced plan to nationalise its lithium sector, by requiring that the state has a majority stake in a public-private partnership in all new projects, will likely weaken the sector’s attractiveness, pushing investors towards markets such as Argentina and Australia.
• Nevertheless, Chile’s substantial lithium reserves

Key View

• After the Banco Central de Chile (BCC)’s decision to hold its policy rate at 11.25% at its May 12 2023 meeting, we continue to expect the rate will remain on hold through H123 as inflation – though slowing – remains far above the bank’s target.
• The bank will begin cutting in H223 as disinflation continues and the US Fed goes on hold

Key View

• Q422 data confirmed our estimate that Chile’s economy expanded by 2.4% last year, and we retain the view that falling consumption and investment will cause output to contract by 0.8% in 2023.
• That said, we expect that the contraction will be focused in the first half of the year, and that easing inflation and solid export growth will

Key View

• We at Fitch Solutions expect that a rebound in copper output and lower energy import prices will help narrow Chile’s current account deficit in 2023.
• We forecast that the deficit will shrink from an estimated 9.3% of GDP in 2022 – an all-time high – to 5.1% in 2023, though this remains elevated by historical standards.
• We do not

Key View

• Telefonica is to replace its copper local access infrastructure with fibre, a four-year project that highlights a reversal of its desire to exit Chile as part of its broader Latin America retreat.
• Fixed-line voice service demand is on a sharp decline in the country, adding further incentives for the telco to transfer its consumer