Chile: 2022 Article IV Consultation-Press Release; Staff Report; Staff Supplement; and Statement by the Executive Director for Chile

IMF Staff Country Reports, January 20, 2023

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Chile: 2022 Article IV Consultation-Press Release; Staff Report; Staff Supplement; and Statement by the Executive Director for Chile

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Bibliographic details

• Published: January 20, 2023
• Series: IMF Staff Country Reports
• DOI: https://doi.org/10.5089/9798400231469.002

Overview and Context

• After an impressive recovery from the coronavirus disease 2019 pandemic, the Chilean economy is undergoing a necessary transition toward sustainable growth amid a challenging external environment.
• Policy implementation remains very strong, geared toward correcting macroeconomic imbalances that built up during the pandemic while protecting the most vulnerable and advancing structural reforms, consistent with past IMF advice.
• The constitutional reform process will continue but uncertainty over possible outcomes has narrowed.

Risks and External Environment

• External risks:
  • Possible abrupt global slowdown.
  • Sharply tighter global financial conditions.
  • Commodity price shocks.
  • Intensification of spillovers from Russia’s war in Ukraine.
• Domestic risks:
  • High inflation persisting for longer than expected.
  • Social discontent over high food and energy prices.
  • Slow progress to meet social demands.
• Policy challenge: navigate growth-inflation trade-offs, safeguard financial stability, and maintain fiscal sustainability while supporting the most vulnerable.

Policy Assessment and Recommendations

• Fiscal policy:
  • Implementation focused on correcting pandemic-era macroeconomic imbalances while protecting vulnerable groups.
• Monetary and exchange rate policy:
  • Emphasis on managing inflation risks and exchange rate flexibility (subject tags include "Exchange rate flexibility" and "Monetary policy").
• Structural reforms:
  • Continued advancement of structural reforms aligned with past IMF advice.
• Financial stability:
  • Policies should safeguard financial stability amid tighter global financial conditions and external shocks.

Subjects and Keywords

• Subjects: Exchange rate flexibility, Expenditure, Fiscal policy, Fiscal stance, Foreign exchange, Inflation, International organization, Monetary policy, Pension spending, Prices, Public debt
• Keywords: Caribbean, draft mining royalty bill, Exchange rate flexibility, finance committee of the Senate, Fiscal stance, Global, Inflation, inflation expectation, liability positions vis-à-vis nonresident, Pension spending, Senate's finance committee, South America, Western Hemisphere

Source: Chile: 2022 Article IV Consultation-Press Release; Staff Report; Staff Supplement; and Statement by the Executive Director for Chile (IMF Staff Country Reports 2023, 036).

Content in this bundle

• 1. Constitutional Reform
  • 1. Constitutional Reform (Markdown version)
  • 1. Constitutional Reform (PDF)