2016 marked the latest year in a long period of unusual stagnation for the otherwise resilient Chilean economy. In a feature for International Trade Magazine, Robert von Oldershausen, Senior Relationship Manager for FI Latin America at Commerzbank, explains what has held back growth, and suggests the steps the country might take to economic resurgence.
In the article, ‘Chile’s Road to Recovery’ von Oldershausen shows that Chile was traditionally one of Latin America’s strongest and fastest-growing economies, often boasting annual GDP growth rates of around 5%. In recent years, it has performed considerably below par, posting growth of only 1.9% in 2014, 2.3% in 2015, and an expected 1.8% last year. Other developed economies may be satisfied with such figures; for Chile, they are not up to scratch.
Weak global demand and low prices for the country’s copper have been the key culprits. The metal contributes half of Chile’s total exports, underpinning government revenues and foreign exchange supplies). Von Oldershausen argues that Chile would do well to continue the diversification of its economy – moving away from the extractive sector, developing a wider range of industries, and fostering deeper trade relations with its Latin American neighbours – in order to ensure future prosperity.
Read the article here (with a subscription).