IMF Executive Board Concludes 2026 Article IV Consultation with Chile

IMF News, July 6, 2026

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Economic activity remained robust, with GDP growing at 2.5 percent in 2025 driven by strong non‑mining domestic demand.
Inflation declined to the central bank’s target in early 2026 but has since increased due to higher energy prices associated with the conflict in the Middle East.
Fiscal deficits have persisted due to revenue underperformance, but public debt remains moderate.
The financial system is sound overall, although vulnerabilities persist in construction and real estate.
GDP growth projections:
- 2026: 1.8 percent
- 2027: 2.6 percent (supported by higher copper prices)
Inflation projections:
- Expected to remain temporarily above target in 2026 and early 2027 before converging back to target.

Near‑term risks are tilted to the downside and remain elevated.
A more prolonged period of high oil prices could weigh on growth and inflation; the central bank should stand ready to tighten monetary policy if oil prices remain higher for longer.
Rebuilding fiscal and external buffers, including continuing with the reserve accumulation plan, is recommended to maintain resilience.
Medium-term priorities aligned with government objectives:
- Sustainably and credibly rebuild fiscal buffers.
- Durably lift Chile’s growth through structural reforms.

Authorities plan to reduce the structural fiscal deficit to 1.5 percent of GDP by 2030 and to keep debt below 45 percent of GDP.
Directors noted additional measures would be needed to achieve these objectives amid rising spending pressures.
Recommended fiscal measures and considerations:
- Rationalize expenditures and enhance spending efficiency.
- Carefully prioritize and sequence reforms under the National Reconstruction Plan.
- Carefully consider fiscal costs and growth impact of tax and other reforms to ensure fiscal sustainability.
- Better targeting of the minimum guaranteed pension and consolidation of fragmented social programs to strengthen spending efficiency while protecting the most vulnerable.
- Further refinements to the existing fiscal framework.

Directors highlighted the central bank’s robust inflation targeting framework and encouraged readiness to tighten monetary policy should second round inflation effects materialize.
Directors welcomed the central bank’s international reserve accumulation program that will strengthen resilience against external shocks, reinforcing support from the FCL.
External position is expected to remain broadly in line with medium‑term fundamentals.

Directors agreed that the financial sector remains resilient and well supervised.
Encouraged actions:
- Continue advancing outstanding 2021 FSAP recommendations.
- Maintain progress in strengthening the AML/CFT framework.
- Monitor sectoral vulnerabilities in the real estate and construction sectors.
- Implement the recent pension reform in a well coordinated and gradual manner to avoid abrupt asset reallocations.
Growth-enhancing reforms supported:
- Deregulation to foster higher medium term growth.
- Complementary reforms to narrow labor market skill and gender gaps.
- Measures to improve the minimum wage setting process.
- Reforms to facilitate trade and support innovation and diversification to boost productivity and investment.

Directors commended Chile’s very strong policies and institutional frameworks that supported resilience amid heightened global uncertainty.
Directors welcomed the authorities’ commitment to improve structural fiscal balances, strengthen fiscal and external buffers, and advance structural reforms to preserve macroeconomic stability and enhance sustainable and inclusive growth.

Employment (in percent of labor force, annual average)
- Unemployment rate: 2024: 8.5; 2025: 8.8; 2026: 8.4

Prices
- GDP deflator: 2024: 7.1; 2025: 6.8; 2026: 4.1; 2027: 1.5
- Change of CPI (end of period): 2024: 4.5; 2025: 3.4; 2026: 4.2; 2027: 3.0
- Change of CPI (period average): 2024: 3.7

Balance of Payments (In percent of GDP)
- Current account balance: 2024: -1.2; 2025: -1.4; 2026: -2.1
- Foreign direct investment flows: 2024: -2.2; 2025: -1.9
- Gross external debt: 2024: 74.4; 2025: 77.6; 2026: 72.3; 2027: 71.1

Source: IMF Executive Board communiqué and staff projections from the Article IV Consultation with Chile (July 6, 2026).