{"id":145,"date":"2022-04-01T17:05:45","date_gmt":"2022-04-01T17:05:45","guid":{"rendered":"https:\/\/britcham.cl\/pruebas\/?page_id=145"},"modified":"2026-04-23T14:04:20","modified_gmt":"2026-04-23T17:04:20","slug":"political-economic-environmental","status":"publish","type":"page","link":"https:\/\/britcham.cl\/es\/political-economic-environmental\/","title":{"rendered":"Political, Economic & Environmental"},"content":{"rendered":"\t\t
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POLITICAL, ECONOMIC & ENVIRONMENTAL<\/strong><\/h4>

\u00a0<\/h4>

However, after this long period of relative stability, Chile is confronting renewed uncertainty. Chile\u2019s 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.<\/h4>

The business community is closely watching the government\u2019s 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\u2014proposals to reduce environmental and sectoral permitting times by 30-70% are in process or have been passed.<\/h4>

Some of the perceived and actual risks are captured as follows:<\/h4>

\u00a0<\/h4>

POLITICAL RISK<\/a><\/h4>

ECONOMIC RISK<\/a><\/h4>

ENVIRONMENTAL RISK<\/a><\/h4>

SOCIAL RISK<\/a><\/h4><\/div><\/div>
\"FICH<\/div>
\u00a0<\/div>

\u00a0<\/h4>

Political Risk<\/span><\/h4>

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\u2019s role in pensions, health, education, and social protection, as well as the call for more robust sustainability and climate change provisions.<\/h4>

Many analysts maintain that, despite these pressures, Chile\u2019s 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.<\/h4>

\u00a0<\/h4>

\u00a0<\/h4>

Economic Risk<\/span><\/h4>

Chile\u2019s sovereign wealth funds \u2014 the Pension Reserve Fund (PRF) and the Economic and Social Stabilization Fund (ESSF), established in 2006-2007 \u2014 continue to play a central role in stabilising fiscal revenues, smoothing public spending, supporting social protection, and amortising public debt.<\/h4>

The Central Bank of Chile, while facing elevated inflation in recent years, has made progress bringing inflation down: inflation eased to about\u00a04.3% in 2024<\/strong>, down from higher levels in 2022\u201323, 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\u00a039-40% of GDP<\/strong>, higher than what it had been in 2019.<\/h4>

Chile\u2019s ranking in \u201cEase of Doing Business\u201d 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.<\/h4>

However, Chile still carries several important economic risks:<\/h4>

  • 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.<\/h4><\/li>

  • Gaps in research, innovation, and productivity growth; Chile has been working to strengthen innovation policies but lags in some indicators compared to peer countries.<\/h4><\/li>

  • Regulatory and permitting processes \u2014 especially for mining, energy, and infrastructure projects \u2014 which remain complex, sometimes slow, and subject to political or environmental review processes that can introduce delays and cost overruns.<\/h4><\/li>

  • 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.<\/h4><\/li><\/ul>

    Chile 2025: Key Numbers (latest public projections)<\/h4>

    • Real GDP growth (\u201925):<\/strong>\u00a0~2.0\u20132.5%<\/strong>
      IMF \u201cAt a Glance\u201d 2.0%; World Bank 2.1%; OECD 2.4%; BCCh IPoM raised range to\u00a02.25\u20132.75%<\/strong>.<\/h4><\/li>

    • Inflation (CPI, end-\u201925):<\/strong>\u00a0~4.0\u20134.6%<\/strong>; BCCh now sees convergence to 3% in\u00a0Q3-2026<\/strong>\u00a0(not 2025).<\/h4><\/li>

    • Monetary policy rate (TPM):<\/strong>\u00a04.75%<\/strong>\u00a0(Sept. decision).<\/h4><\/li>

    • Public debt (gen. gov., % GDP, 2025):<\/strong>\u00a0around\u00a0~41\u201342%<\/strong>\u00a0(model-based \/ official baselines).<\/h4><\/li>

    • Current account deficit (\u201925):<\/strong>\u00a0~2\u00bd% of GDP<\/strong>\u00a0(IMF).<\/h4><\/li>

    • Sovereign wealth funds (market value):<\/strong>
      \u2014\u00a0PRF:<\/strong>\u00a0US$ 9.763bn<\/strong>\u00a0(July 2025) \u2022\u00a0ESSF:<\/strong>\u00a0US$ 3.806bn<\/strong>\u00a0(July 2025).<\/h4><\/li>

    • Copper price assumption (policy\/market):<\/strong>\u00a0US$ 4.30\/lb average in 2025<\/strong>\u00a0(Cochilco baseline; maintained Aug-2025).<\/h4><\/li>

    • Permitting reform:<\/strong>\u00a0Sectoral Permit Law approved (July 2025)<\/strong>; government estimates\u00a030\u201370%<\/strong>\u00a0faster processing; environmental-system modernization still pending.<\/h4><\/li>

    • IMF backstop:<\/strong>\u00a0Positive 2025 review of Chile\u2019s\u00a0Flexible Credit Line<\/strong>; policy focus on prudent fiscal path and supply-side reforms.<\/h4><\/li><\/ul>

      \u00a0<\/h4>

      \u00a0<\/h4>

      Environmental Risk<\/span><\/h4>

      • Climate change.<\/strong>\u00a0Chile faces rising heat waves and hydrological stress, but has a Framework Law on Climate Change committing to carbon-neutrality and climate-resilience by 2050 (policy anchor for transition and adaptation). Water-stress metrics place Chile among the higher-risk countries, and recent seasons showed anomalous heat; a brief 2024\u201325 La Ni\u00f1a episode moderated but did not remove extremes.<\/h4><\/li>

      • Earthquakes and tsunamis.<\/strong>\u00a0Located on the Nazca\u2013South America subduction zone, Chile has world-class seismic standards (NCh433, updated after 2010) and a robust tsunami-warning system run by SHOA with DART buoys\u2014risk remains material, but building codes and early-warning capacity reduce vulnerability.<\/h4><\/li>

      • Drought.<\/strong>\u00a0A decade-long \u201cmegadrought\u201d in central Chile depleted reservoirs and groundwater and continues to threaten agriculture and urban supply; mitigation includes accelerated seawater use and new desalination capacity for mining and cities.<\/h4><\/li>

      • Forest fires.<\/strong>\u00a0Climate-driven heat and dryness increased wildfire risk; Chile suffered its deadliest fires in Feb-2024 (over 130 fatalities), prompting international cooperation (e.g., renewed CONAF\u2013CAL FIRE ties) and improved prevention. The 2024\u201325 season saw smaller burned areas in several regions, but hazard remains seasonal and climate-sensitive.<\/h4><\/li><\/ul>

        \u00a0<\/h4>

        \u00a0<\/h4>

        Social Risk<\/span><\/h4>

        • Migration.<\/strong>\u00a0Foreign-born residents reached\u00a0~1.92 million in 2023 (~10% of the population)<\/strong>; an estimated\u00a017.6%<\/strong>\u00a0are irregular. Policy has tightened (greater focus on expulsions), and inflows show signs of slowing, but integration and regularization remain key execution risks.<\/h4><\/li>

        • Regional & ethnic parity.<\/strong>\u00a0Persistent territorial and productivity gaps (e.g.,\u00a0Antofagasta<\/strong>\u00a0far above the national benchmark;\u00a0\u00d1uble<\/strong>\u00a0well below) intersect with Indigenous demands and security tensions in the\u00a0Southern Macro-zone<\/strong>, where a\u00a0state of exception<\/strong>\u00a0continues while a new\u00a0Peace & Understanding Commission<\/strong>\u00a0roadmap is debated.<\/h4><\/li>

        • Poverty & inequality.<\/strong>\u00a0Income-poverty fell to\u00a06.5% (CASEN 2022)<\/strong>, but inequality remains high (Gini\u00a0~43<\/strong>), and experts are weighing a broader, multidimensional metric that could yield a significantly higher poverty rate\u2014underscoring social-policy pressures.<\/h4><\/li>

        • Drug abuse.<\/strong>\u00a0SENDA finds\u00a0stable or declining<\/strong>\u00a0school-age use of alcohol\/tobacco and\u00a0stabilization<\/strong>\u00a0in marijuana\/cocaine (2023 cohort), while adult-use trends from\u00a0ENPG 2022<\/strong>\u00a0still show substantial alcohol and cannabis prevalence; emerging synthetic drugs (e.g.,\u00a0TUSI\/ketamine<\/strong>) pose targeted youth risks.<\/h4><\/li>

        • Obesity.<\/strong>\u00a0Chile has one of the\u00a0highest obesity rates in South America<\/strong>; the World Obesity Atlas projects\u00a0~42% of adults living with obesity in 2025<\/strong>, raising long-term health-cost and productivity concerns.<\/h4><\/li>

        • Crime & security.<\/strong>\u00a0Homicides rose to\u00a0~6.0 per 100k in 2024<\/strong>; the economic cost of rising crime is estimated at\u00a0US$8.2bn (~2.6% of GDP)<\/strong>, weighing on business hours, investment, and sentiment despite reinforcement of security policies.<\/h4><\/li><\/ul><\/div><\/div>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"

          POLITICAL, ECONOMIC & ENVIRONMENTAL However, after this long period of relative stability, Chile is confronting renewed uncertainty. Chile\u2019s 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<\/p>\n","protected":false},"author":6,"featured_media":567,"parent":0,"menu_order":5,"comment_status":"closed","ping_status":"closed","template":"","meta":{"_acf_changed":false,"inline_featured_image":false,"_uag_custom_page_level_css":"","site-sidebar-layout":"no-sidebar","site-content-layout":"page-builder","ast-site-content-layout":"full-width-container","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"disabled","ast-breadcrumbs-content":"","ast-featured-img":"disabled","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"default","adv-header-id-meta":"","stick-header-meta":"default","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"set","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"class_list":["post-145","page","type-page","status-publish","has-post-thumbnail","hentry"],"acf":[],"uagb_featured_image_src":{"full":["https:\/\/britcham.cl\/pruebas\/wp-content\/uploads\/2022\/04\/FICH_2016_EFE_0054-3000-scaled.jpg",2560,1634,false],"thumbnail":["https:\/\/britcham.cl\/pruebas\/wp-content\/uploads\/2022\/04\/FICH_2016_EFE_0054-3000-150x150.jpg",150,150,true],"medium":["https:\/\/britcham.cl\/pruebas\/wp-content\/uploads\/2022\/04\/FICH_2016_EFE_0054-3000-300x192.jpg",300,192,true],"medium_large":["https:\/\/britcham.cl\/pruebas\/wp-content\/uploads\/2022\/04\/FICH_2016_EFE_0054-3000-768x490.jpg",768,490,true],"large":["https:\/\/britcham.cl\/pruebas\/wp-content\/uploads\/2022\/04\/FICH_2016_EFE_0054-3000-1024x654.jpg",1024,654,true],"1536x1536":["https:\/\/britcham.cl\/pruebas\/wp-content\/uploads\/2022\/04\/FICH_2016_EFE_0054-3000-1536x980.jpg",1536,980,true],"2048x2048":["https:\/\/britcham.cl\/pruebas\/wp-content\/uploads\/2022\/04\/FICH_2016_EFE_0054-3000-2048x1307.jpg",2048,1307,true]},"uagb_author_info":{"display_name":"Isabel Juppet","author_link":"https:\/\/britcham.cl\/es\/author\/isabel-juppetbritcham-cl\/"},"uagb_comment_info":0,"uagb_excerpt":"POLITICAL, ECONOMIC & ENVIRONMENTAL However, after this long period of relative stability, Chile is confronting renewed uncertainty. Chile\u2019s 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","_links":{"self":[{"href":"https:\/\/britcham.cl\/es\/wp-json\/wp\/v2\/pages\/145","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/britcham.cl\/es\/wp-json\/wp\/v2\/pages"}],"about":[{"href":"https:\/\/britcham.cl\/es\/wp-json\/wp\/v2\/types\/page"}],"author":[{"embeddable":true,"href":"https:\/\/britcham.cl\/es\/wp-json\/wp\/v2\/users\/6"}],"replies":[{"embeddable":true,"href":"https:\/\/britcham.cl\/es\/wp-json\/wp\/v2\/comments?post=145"}],"version-history":[{"count":11,"href":"https:\/\/britcham.cl\/es\/wp-json\/wp\/v2\/pages\/145\/revisions"}],"predecessor-version":[{"id":10246,"href":"https:\/\/britcham.cl\/es\/wp-json\/wp\/v2\/pages\/145\/revisions\/10246"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/britcham.cl\/es\/wp-json\/wp\/v2\/media\/567"}],"wp:attachment":[{"href":"https:\/\/britcham.cl\/es\/wp-json\/wp\/v2\/media?parent=145"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}