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Chile Economy

    Economy—overview: Chile has a prosperous, essentially free market economy. Civilian governments—which took over from the military in March 1990—have continued to reduce the government's role in the economy while shifting the emphasis of public spending toward social programs. Growth in real GDP averaged more than 7.0% in 1991-1997 but fell to about half of that average in 1998 because of spillover from the global financial crisis. Inflation has been on a downward trend and hit a 60-year low in 1998. Chile's currency and foreign reserves also are strong, as sustained foreign capital inflows—including significant direct investment—have more than offset current account deficits and public debt buy-backs. President FREI, who took office in March 1994, has placed improving Chile's education system and developing foreign export markets at the top of his economic agenda. The Chilean economy remains largely dependent on a few sectors—particularly copper mining, fishing, and forestry. Success in meeting the government's goal of sustained annual economic growth of 5% depends largely on world prices for these commodities, continued foreign investor confidence, and the government's ability to maintain a conservative fiscal stance. In 1996, Chile became an associate member of Mercosur and concluded a free trade agreement with Canada.

    GDP: purchasing power parity—$184.6 billion (1998 est.)

    GDP—real growth rate: 3.5% (1998 est.)

    GDP—per capita: purchasing power parity—$12,500 (1998 est.)

    GDP—composition by sector:
    agriculture: 6%
    industry: 33%
    services: 61% (1997)

    Population below poverty line: 20.5% (1994 est.)

    Household income or consumption by percentage share:
    lowest 10%: 1.4%
    highest 10%: 46.1% (1994)

    Inflation rate (consumer prices): 4.7% (1998)

    Labor force: 5.8 million (1998 est.)

    Labor force—by occupation: services 38.3% (includes government 12%), industry and commerce 33.8%, agriculture, forestry, and fishing 19.2%, mining 2.3%, construction 6.4% (1990)

    Unemployment rate: 6.4% (1998)

    Budget:
    revenues: $17 billion
    expenditures: $17 billion, including capital expenditures of $NA (1996 est.)

    Industries: copper, other minerals, foodstuffs, fish processing, iron and steel, wood and wood products, transport equipment, cement, textiles

    Industrial production growth rate: -1.1% (1998)

    Electricity—production: 35.81 billion kWh (1996)

    Electricity—production by source:
    fossil fuel: 41.89%
    hydro: 58.11%
    nuclear: 0%
    other: 0% (1996)

    Electricity—consumption: 35.81 billion kWh (1996)

    Electricity—exports: 0 kWh (1996)

    Electricity—imports: 0 kWh (1996)

    Agriculture—products: wheat, corn, grapes, beans, sugar beets, potatoes, fruit; beef, poultry, wool; timber; fish

    Exports: $14.9 billion (f.o.b., 1998)

    Exports—commodities: copper 37%, other metals and minerals 8.2%, wood products 7.1%, fish and fishmeal 9.8%, fruits 8.4% (1994)

    Exports—partners: EU 25%, US 15%, Asia 34%, Latin America 20% (1995 est.)

    Imports: $17.5 billion (f.o.b., 1998)

    Imports—commodities: capital goods 25.2%, spare parts 24.8%, raw materials 15.4%, petroleum 10%, foodstuffs 5.7% (1994)

    Imports—partners: EU 18%, US 25%, Asia 16%, Latin America 26% (1995 est.)

    Debt—external: $31.5 billion (1998)

    Economic aid—recipient: ODA, $50.3 million (1996 est.)

    Currency: 1 Chilean peso (Ch$) = 100 centavos

    Exchange rates: Chilean pesos (Ch$) per US$1—475.68 (January 1999), 460.29 (1998), 419.30 (1997), 412.27 (1996), 396.78 (1995), 420.08 (1994)

    Fiscal year: calendar year

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Revised 1-Mar-99
Copyright © 1999 Photius Coutsoukis (all rights reserved)