Chile – Brief Economic Overview
Chile has access to plentiful natural resources. Consequently, exporting goods and trading with other countries is the principal source of revenue for the Chilean economy and Chile is very dependent on international trade. Chile is the number one producer of copper in the world, the export of which accounts for one-third of government revenue. Chile is the fifth largest producer of wine in the world. Other notable resources include timber, fish products, and chemicals. The CIA World Factbook reports that Chile’s exports amount to $71.03 billion (2010 est.), more than one-fourth of GDP.
Chile is a member of a multitude of trade organizations including the Common Market of the Southern Cone (MERCOSUR) and the Asia-Pacific Economic Cooperation organization (APEC). Chile is also the first South American country to become a full member of the Organization for Economic Co-operation and Development (OPEC). Chile has 57 “bilateral or regional” trade agreements with various countries including free trade agreements with the United States, Canada, the European Union, Mexico, and China. Just over 27% of Chile’s exports as well as 27.9% of its imports are exchanged between the United States and China. Chile imports $55.17 billion in goods (2010 est.), and its major import needs are listed as petroleum and petroleum products, chemicals, electrical and telecommunications equipment, industrial machinery, vehicles, and natural gas. Chile is a very energy dependent country; however, a $3.2 billion hydroelectricity project called HydroAysen was recently approved by the Chilean government. According to the project’s official website HidroAysen will tap into Chile’s numerous waterways and reduce the country’s dependency on other countries for energy needs. The passing of the HidroAysen resulted in massive protests throughout Chile. The project is set to construct dams on rivers in the southern region of Chile known as Patagonia, an area which is considered by many to be sacred and best left alone.
The 2010 estimate of inflation in Chile is 1.4%. The rate of inflation has been very erratic over the past decade. Chile’s GDP has grown at an average of 4.2% per year over the last decade.
The 2010 estimate of Chile’s GDP measured using PPP is $257.9 billion, placing it at number 46th in the world. The most recent GDP per capita measure comes in at $15,400 USD making it 64th in the world, considerably lower than the overall GDP ranking. Nevertheless, GDP per capita in Chile has increased every year since 1999, with the exception of 2009.