GDP of Chile in 2023 - Expenditure Approach, Sector Output, and Regional GDP

Chile’s real GDP is expected to contract by 1% in 2023, according to projection by the IMF. This is largely due to economic normalization after a 2.4% expansion in 2022, driving by the huge fiscal stimulus and pension withdrawals. High inflation, interest rates, slow labor market recovery, policy uncertainty, and pessimistic business sentiment are also contributing factors. However, a sequential recovery is expected from the second quarter of 2023, with decreasing inflation, growing government spending, reduced policy uncertainty, and increased demand for Chilean exports as China eases COVID-19 restrictions. The Chilean government has introduced a “Let’s Invest in Chile” plan to stimulate private investment in 2023 through tax incentives, easier financing conditions, and greater efficiency in the processing of permits. The risks going forward include global growth slowd...