In 1997 the Chilean economy completed 14 years of uninterrupted growth. Inflation again declined, slightly, ending at around 6%. Gross domestic product expanded by 6.9%, domestic demand by 8.5%. The national savings rate increased from 26.3% to 27.8%, but the amount saved was insufficient to finance the vigorous effort in gross capital formation (35.6% of output), which again required a significant amount of foreign capital. The current account therefore yielded a deficit of 5.3% of GDP, similar to the figure for 1996 but significantly higher than those for previous years; however, the deficit was more than covered by medium and long-term foreign investment. The public sector helped sustain investment with a savings rate of 5.5% of GDP and an overall surplus of 1.9%. Unemployment affected 6.1% of the labour force, while employment increased by 2.1%, real wages by 2.4% and average labour productivity by 5%.

Related Subject(s): Economic and Social Development
Countries: Chile
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