Two decades ago, Chile made the commitment to advance with economic reform, proactive social investments, transparent public sector management and stable consensual governance.
In 2011, the government proposed seven structural reforms in the areas of education and health, poverty and crime reduction and reform of the state, the political system and the environmental system.
Chile is one of Latin America’s fastest growing economies. During the past 15 years, the country recorded an average annual per capita growth of 4.1 percent. Per capita income doubled in real terms during this period.
Chile has consolidated macroeconomic stability in part through the adoption of a floating exchange rate and the establishment of strict inflation targets. The application of a carefully calibrated fiscal policy has been crucial in balancing an expansion of social programs with fiscal discipline.
The country’s financial system is large and well-diversified compared with other countries in the region. It is considered to have a solid regulatory and supervisory framework, as well as the capacity for recovery in the event of crises.
During the second half of 2008, growth decelerated as global demand for Chilean exports declined and the terms of exchange deteriorated. Real GDP growth decreased to 3.7% in 2008 and contracted -1.5% in 2009.
A strong fiscal stimulus package financed with the savings accumulated during the years of high copper prices, together with a flexible monetary policy, supported an early economic recovery beginning in the last quarter of 2009. At the end of that year, Chile became the first South American country to join the OECD.
Nevertheless, the disturbances associated with the devastating earthquake of February 2010 led to a -2.1 percent contraction in the first quarter of 2010. The economy rebounded vigorously, however, recording a growth of 5.2 percent in 2010, driven by reconstruction and investment. Domestic consumption spurred continued growth in 2011, which reached 2.8 percent in the first quarter.
Chile faces two considerable challenges: enhance productivity and achieve equality of opportunities. Chile's growth slowed from an average of 7.6 percent in 1986-1997 to 3.5 percent in 2000-2009. In addition, productivity growth and investment levels experienced a downward trend throughout much of the past decade.
The second challenge is the need to tackle inequality. While Chile has made substantial progress in reducing poverty (15 percent in 2009), the average income of the richest 20 percent of Chileans was 12 times that of the poorest 20 percent in 2009. Although Chile has actively invested in social protection programs, middle- and low-income households remain
vulnerable to crises. Despite the significant improvement recorded over the past 20 years, infrastructure and public services are still out of reach for many Chileans.
For the Government of Chile, education at all levels is a fundamental pillar of economic and social progress. Nearly a million of the country’s 17 million inhabitants are enrolled in tertiary education and a fourth of these students come from low-income households.
Over the past decade, the number of students from the two lowest-income quintiles has tripled. A 2009 OECD and World Bank review of tertiary education reported that Chile requires second-generation reforms that focus on more complex challenges, such as linking financing to performance and accountability, and improving the quality and pertinence of classroom teaching.
The Government of Chile has launched an ambitious development agenda to support the country's ultimate goal of achieving high-income developed status by 2018. The government plans to emphasize three strategic areas during 2010-2014: i) achieving greater competitiveness, including the modernization of the state; ii) increasing job creation and improving job quality; and iii) promoting investment. Moreover, the government is committed to other important reforms aimed at strengthening social policies and protecting the environment.
Source: World Bank
Population growth (annual %)
Surface area (sq. km) (thousands)
Life expectancy at birth, total (years)
Mortality rate, infant (per 1,000 live births)
GNI (current US$) (billions)
GNI per capita, Atlas method (current US$)
Unemployment, total (% of total labor force)
External debt stocks (% of GNI)
Literacy rate, adult female (% of females ages 15 and above)
Literacy rate, adult male (% of males ages 15 and above)
CO2 emissions (metric tons per capita)
Source: World Bank Development Indicators