The Chilean economy concluded the 2025 fiscal year with stronger growth than anticipated, according to national accounts released on March 18. The Central Bank of Chile reported a 2.5% increase in Gross Domestic Product compared to the previous year. This figure aligns with initial government projections and surpasses the preliminary 2.3% estimate derived from the Imacec index. The data provides a clearer picture of the nation's economic resilience following global headwinds.
Quarterly data indicates a reactivation in the final months of the year, with the fourth quarter growing 0.6% relative to the third. This contrasts with a 0.9% increase in the first quarter and a contraction of 0.3% in the third quarter. The trajectory suggests a stabilization of economic activity following a period of volatility throughout the calendar year. Seasonal adjustments were applied to ensure accurate comparisons across the different months of the period.
Public debt dynamics also shifted favorably, halting an upward trend to settle at 41.5% of GDP in 2025. This represents a decline from the 41.7% recorded in 2024, marking a significant improvement for fiscal health. In contrast, the average public debt across OECD nations reached 112% of GDP in 2024, highlighting Chile's relatively conservative fiscal position. Sovereign credit ratings have remained stable as a result of this disciplined approach to public spending.
Sectoral performance varied significantly, with fishing leading growth at 15.8% and agriculture expanding by 6.3%. Commerce and hospitality services also contributed positively, rising 6.1% and 4.0% respectively. Conversely, the copper mining sector contracted by 2.9%, while electricity and water supply activities fell by 2.7%. These divergent trends reflect the complex interplay between natural resource cycles and domestic service demand.
Domestic demand drove the expansion, fueled by robust household consumption and a sharp recovery in investment. Household spending increased 2.7%, driven largely by non-durable goods and health services. Government consumption grew 3.0%, while total investment surged 8.9% due to higher machinery purchases. Private sector confidence appears to have returned as businesses expanded their capital expenditure plans significantly.
External trade dynamics presented a mixed picture, with exports rising 4.6% against a 10.5% increase in imports. The faster growth in imports reduced the net positive impact of trade on real GDP growth. However, the national current account deficit improved substantially compared to the 8.7% of GDP deficit seen in 2022. The trade balance remains sensitive to fluctuations in global commodity prices and regional economic conditions.
Monetary policy remained a key factor influencing the economic trajectory throughout the period. The Central Bank maintained a policy rate of 4.5% by December 2025, down from a peak of 11.25% in 2023. Analysts argue this level remains restrictive relative to the estimated neutral rate of 4% and could dampen potential growth. The decision to pause rate cuts reflects a cautious stance on inflation risks despite cooling price pressures. This approach prioritizes price stability over immediate economic acceleration.
The average annual GDP growth for the Gabriel Boric administration reached 2.0% across the 2022 to 2025 period. This compares to 2.5% under the previous Piñera II government and 1.8% during the Bachelet II term. Fiscal policy played a crucial stimulus role, preventing stagnation that might have persisted from 2023 adjustments. Historical comparisons suggest that economic cycles in Chile remain highly sensitive to external commodity shocks.
Real national income available grew 4.0% in 2025, outpacing the GDP expansion and narrowing the gap with domestic output. This metric accounts for remittances and utility repatriations while adjusting for purchasing power variations driven by commodity prices. Future economic performance will likely depend on the balance between inflation control and activity stimulation. This indicator offers a more comprehensive view of the actual purchasing power available to Chilean households.
The Central Bank has shown reluctance to accelerate rate cuts despite controlled inflation levels. Observers warn that excessive caution could impose unnecessary costs on employment and growth in the coming year. Continued monitoring of fiscal and monetary coordination remains essential for sustained stability. Market participants will closely watch upcoming policy meetings for signals regarding the path of interest rates. Investors are particularly focused on the next quarter's inflation report.
