Chile Enters 2026 with Renewed Economic Resilience

As 2026 begins, Chile’s economy stands on firmer ground than many had predicted just a year ago, marking a period of stabilization and renewed optimism.

Reviewing 2025, the country witnessed more robust growth than anticipated, especially outside the mining sector, where non-mining GDP approached 3%, nearly one percentage point above early projections. This positive shift was propelled by a significant increase in investment—particularly in machinery and equipment linked to the mining and energy sectors—which benefited from persistently high copper prices and improved global risk appetite. Although private consumption rebounded more gradually, overall economic activity consistently exceeded forecasts, signaling underlying resilience.

Inflation, a central concern in recent years, followed a less predictable path. Early in 2025, inflation surprised both on the upside and downside, complicating efforts to distinguish between temporary shocks and persistent pressures. However, as the year closed, inflation data began to not only stabilize but also fell below expectations. Currency appreciation, reduced external cost pressures, and a more favorable global economic backdrop contributed to inflation returning toward the Central Bank’s 3% target, with projections indicating convergence in the first quarter of 2026.

Monetary policy adapted to these shifting dynamics, moving away from the overtly restrictive stance of the recent past. By the end of 2025, the policy rate settled at 4.5%, representing a mildly contractionary, yet increasingly normalized, position. These policy adjustments were guided by careful interpretation of data and the evolving outlook for both inflation and economic activity, ensuring flexibility amid ongoing global uncertainties.

Looking ahead, challenges persist. Observers are closely watching for signs of improved productivity supporting sustainable growth, while the impact of currency movements and external risks remain in sharp focus. Despite these uncertainties, Chile’s solid macroeconomic framework and prudent policy response have allowed it to rebound without major imbalances, positioning the country to build on this progress throughout 2026.

This transition to economic normalization underscores Chile’s resilience in the face of global headwinds and affirms the effectiveness of its policy approach in safeguarding stability and growth.