The International Monetary Fund (IMF) has raised its growth projection for Chile's Gross Domestic Product (GDP) to 2.4%, an increase of nearly half a percentage point from the previous 2% estimate. This marks the international body's first update since José Antonio Kast took office last March.
In its 'World Economic Outlook' (WEO) report, released this Tuesday, the organization also forecasted economic expansion of 2.6% for 2027. The report represents a shift from last October's outlook, when the IMF had lowered its 2026 forecast to 2%.
Regarding inflation, the Washington-based institution projects a 2.9% increase for the current year and 3.3% for 2027. As for the labor market, the organization estimates unemployment rates of 8.1% and 7.6% for those same periods.
Regional Outlook and Fiscal Challenges
The World Bank shared a similar outlook in its recent 'Economic Update for Latin America and the Caribbean,' projecting growth of 2.4% this year and 2.3% for 2027. According to the institution, the Chilean economy is stabilizing, driven by domestic demand and the strength of mining exports.
However, the organization warned that the country must face regional challenges to improve productivity. This comes as monetary policy rates gradually normalize toward neutral levels.
Meanwhile, the Kast administration is preparing a package of measures to be presented to Parliament this Wednesday. The proposal includes reducing corporate tax from 27% to 23% and eliminating the capital gains tax.
The Kast administration, which promised an 'emergency government' to combat crime and migration, aims to implement a $6 billion fiscal cut over an 18-month period. The country follows a 2025 characterized by 2.5% growth and a structural fiscal deficit of 3.6% of GDP, the highest figure in two decades.
In contrast, Chile's Central Bank took a more cautious stance, lowering its forecast for 2026. The institution reduced its expected range from 2%–3% to 1.5%–2.5%, citing rising oil prices due to the conflict in the Middle East.
