The Chile economy is set to be the first major economy in Latin America to return to pre-pandemic strength, with gross domestic product (GDP) per capita predicted to recover by the end of 2021.
That is according to the latest forecasts from the Organization for Economic Co-operation and Development (OECD) — an intergovernmental economic organization that promotes democratic trade practices and whose members account for more than 60% of global GDP.
The news will be welcomed by anyone looking to register a company in Chile, or enter the market some other way, with Latin America’s most developed country showing that it will be back to business as usual ahead of some of its regional competitors.
The OECD analysis reports that Colombia and Brazil are expected to recover in 2022, while Mexico will see GDP per capita hitting pre-pandemic levels in 2023. A significant contributor to Chile’s fast recovery — with the OECD projecting 6.7% economic growth over 2021 — has been the rapid rollout of vaccinations, with 45% of the population fully vaccinated by the end of May 2021.
According to Aida Caldera, head of division at the OECD Economics Department, another major contributor has been rising commodity prices.
“One positive thing that is benefiting almost all countries(in the region): the improvement in the price of raw materials,” Caldera was reported saying by Spanish newspaper El Pais.
Although the services industry represents almost 60% of the Chile economy, the country has a large mining industry, with copper a key export product and rising significantly in price over the past year, while gems and precious metals also generate significant revenue.
The Chile economy is ripe for investment
Chile is known as a free trade beacon and an investment hub in Latin America, despite its relatively modest size, with a population of under 20 million people. That is partly because the country is well-known for its pro-business outlook and high levels of development, while Chile is also the highest performing country in the region in the UN’s Human Development Index and Gender Development Index.
It also has dozens of free trade agreements (FTAs) in place, providing local business with preferential access to many key global markets, as well as being a founding member of the Pacific Alliance — a ten year old economic integration initiative that also includes Colombia, Mexico, and Peru, and has plans to expand beyond the region.
All of those factors make Chile an attractive destination for foreign investors seeking to enter the region, and with commodity prices on the rise and the Chile economy set to rapidly recover, that interest could yet spike further.
Advantages of the Chile economy
The following conditions make investing in Chile particularly attractive:
Abundant natural resources: Beyond its wealth of metals and gems, Chile also boasts extensive forests and available arable land.
High-skilled talent: As one of the most developed countries in the region, with a large services industry, Chile has a large pool of highly-educated and skilled workers.
Strong trade opportunities: Chile’s status as a major promoter of free trade and a hub for regional trade, with good access to major Asian markets, offer strong trade opportunities.
Pro-business approach: Chile has risen to its current levels of development thanks to its pro-business approach, which will see it continue to prosper in the future.
Biz Latin Hub can support your business in Chile
At Biz Latin Hub, our team of multilingual company formation specialists is equipped to help you get established in the Chile economy. With our full suite of back-office solutions, including commercial representation, recruitment, legal, and accounting services, we can be your single point of contact for entering and doing business in Chile, or any of the other 17 jurisdictions around Latin America and the Caribbean where we are present.
Reach out to us now to discuss your business options.
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