However, after this long period of relative stability, Chile is confronting renewed uncertainty. Chile’s political landscape has shifted following widespread social unrest beginning in late 2019. Chileans twice rejected proposed new constitutions (in September 2022 and December 2023), and President Gabriel Boric has stated there will be no third attempt during his term; the 1980 Constitution remains in force.
The business community is closely watching the government’s reform agenda. Key government proposals are underway in tax policy (including reforms to exemptions, capital gains rules, and tax burdens), pension reform has recently been approved after long delays, and substantial efforts are being made to speed up permitting for investment- and infrastructure-related projects—proposals to reduce environmental and sectoral permitting times by 30-70% are in process or have been passed.
Some of the perceived and actual risks are captured as follows:
The constitutional process that began with a community-led convention in 2020 has now concluded after two separate proposals were rejected at the polls (in 2022 and 2023). As a result, Chile continues to operate under the 1980 Constitution, and President Gabriel Boric has confirmed that no further constitutional attempts will be made during his term. Nevertheless, the social demands that gave rise to the process remain, particularly regarding the state’s role in pensions, health, education, and social protection, as well as the call for more robust sustainability and climate change provisions.
Many analysts maintain that, despite these pressures, Chile’s political and economic structure is unlikely to undergo radical change in the near term. The country continues to operate within a democratic framework, guided by the rule of law and its international treaty obligations, which provide an important layer of continuity and predictability for businesses and investors.
Chile’s sovereign wealth funds — the Pension Reserve Fund (PRF) and the Economic and Social Stabilization Fund (ESSF), established in 2006-2007 — continue to play a central role in stabilising fiscal revenues, smoothing public spending, supporting social protection, and amortising public debt.
The Central Bank of Chile, while facing elevated inflation in recent years, has made progress bringing inflation down: inflation eased to about 4.3% in 2024, down from higher levels in 2022–23, although it remains above the target of ~3%. Public debt has increased compared to the pre-pandemic period: as of recent estimates, public debt is around 39-40% of GDP, higher than what it had been in 2019.
Chile’s ranking in “Ease of Doing Business” has slipped from its earlier peaks; while historically praised for strengths in enforcing contracts, protecting minority investors, and for relative ease in starting a business, recent political uncertainty, regulatory changes, and delays in permitting have raised concerns for the business community.
However, Chile still carries several important economic risks:
Its heavy dependence on copper exports and demand from its largest market, particularly China; fluctuations in copper prices have a large effect on fiscal revenues and export performance.
Gaps in research, innovation, and productivity growth; Chile has been working to strengthen innovation policies but lags in some indicators compared to peer countries.
Regulatory and permitting processes — especially for mining, energy, and infrastructure projects — which remain complex, sometimes slow, and subject to political or environmental review processes that can introduce delays and cost overruns.
Labour relations and social expectations: strikes, protests, and demands for higher wages or better working conditions continue to pose risks of disruption, especially in strategic sectors like mining and ports.
Real GDP growth (’25): ~2.0–2.5%
IMF “At a Glance” 2.0%; World Bank 2.1%; OECD 2.4%; BCCh IPoM raised range to 2.25–2.75%.
Inflation (CPI, end-’25): ~4.0–4.6%; BCCh now sees convergence to 3% in Q3-2026 (not 2025).
Monetary policy rate (TPM): 4.75% (Sept. decision).
Public debt (gen. gov., % GDP, 2025): around ~41–42% (model-based / official baselines).
Current account deficit (’25): ~2½% of GDP (IMF).
Sovereign wealth funds (market value):
— PRF: US$ 9.763bn (July 2025) • ESSF: US$ 3.806bn (July 2025).
Copper price assumption (policy/market): US$ 4.30/lb average in 2025 (Cochilco baseline; maintained Aug-2025).
Permitting reform: Sectoral Permit Law approved (July 2025); government estimates 30–70% faster processing; environmental-system modernization still pending.
IMF backstop: Positive 2025 review of Chile’s Flexible Credit Line; policy focus on prudent fiscal path and supply-side reforms.
Migration. Foreign-born residents reached ~1.92 million in 2023 (~10% of the population); an estimated 17.6% are irregular. Policy has tightened (greater focus on expulsions), and inflows show signs of slowing, but integration and regularization remain key execution risks.
Regional & ethnic parity. Persistent territorial and productivity gaps (e.g., Antofagasta far above the national benchmark; Ñuble well below) intersect with Indigenous demands and security tensions in the Southern Macro-zone, where a state of exception continues while a new Peace & Understanding Commission roadmap is debated.
Poverty & inequality. Income-poverty fell to 6.5% (CASEN 2022), but inequality remains high (Gini ~43), and experts are weighing a broader, multidimensional metric that could yield a significantly higher poverty rate—underscoring social-policy pressures.
Drug abuse. SENDA finds stable or declining school-age use of alcohol/tobacco and stabilization in marijuana/cocaine (2023 cohort), while adult-use trends from ENPG 2022 still show substantial alcohol and cannabis prevalence; emerging synthetic drugs (e.g., TUSI/ketamine) pose targeted youth risks.
Obesity. Chile has one of the highest obesity rates in South America; the World Obesity Atlas projects ~42% of adults living with obesity in 2025, raising long-term health-cost and productivity concerns.
Crime & security. Homicides rose to ~6.0 per 100k in 2024; the economic cost of rising crime is estimated at US$8.2bn (~2.6% of GDP), weighing on business hours, investment, and sentiment despite reinforcement of security policies.
