Chile

For the second consecutive year, the Chilean economy expanded at a rate of over 6%, in a context of favourable terms of trade, large fiscal and balance-of-payments surpluses, inflation within the target range and unemployment levels gradually declining, albeit more slowly than desired. In 2005 growth was led by domestic demand (i.e., consumption and investment), in contrast to the export-driven performance of 2004. The central bank maintained its policy of curbing monetary expansion by raising interest rates as the gap between actual and potential output gradually narrowed. The fiscal policy of a structural surplus of 1% of GDP was also maintained, which, together with exceptional copper and molybdenum prices, translated into an actual surplus of 4.7% of GDP. The new government, which entered office in March 2006, intends to continue with this policy.

Sustainable Development Goals:

Decent Work and Economic Growth

Industry, Innovation and Infrastructure

Peace, Justice and Strong Institutions