Chile’s economy goes from strength to strength
With the Chilean economy continuing to defy analysts’ predictions, the world is turning its eyes toward South America’s most exciting growth story.
Friday, September 14, 2012
Chile is beginning to attract investment in order to complement and diversify a copper driven economy. Photo courtesy of ahisgett/Facebook.
Despite global economic turmoil, Chile’s economy entered into its fourth consecutive quarter of growth this month, and a strong second quarter expansion of 5.5 percent far exceeded predictions of analysts.
The phenomena of emerging economies experiencing robust growth through periods of worldwide instability is nothing new - just look back to how India saw continued growth of nearly 8 percent in the aftermath of the “Great Recession” in 2008. Yet Chile has historically had an incredibly open market, vulnerable to global trends. So a period of such growth at this time points to fundamentally good economic self management.
“Despite the pessimistic predictions we have heard so much about, the expected slowdown forecast for this year did not happen,” Chile’s Economic Minister Pablo Longueira said in a statement to the press. “Positive performance in domestic demand has allowed us to grow.”
With continued economic difficulties troubling many parts of the continent, politically stable Chile is fast becoming the most attractive gateway to the Latin American market.
Of course there is work to be done, but steps are being made in the right direction. The main obstacle in the way of Chile becoming a hotbed for investment is its somewhat unattractive tax policy for foreign investors. However, the implementation of a policy project known as the Ley Única de Fondos is set to change all that.
Tax payments for non-residents, taxes on domestic bonds, stock market bond trading - all are getting a massive makeover in a bid to make Chile the go-to destination for investment in Latin America. This is great news for the country at large, as such a transformation would Chile, the world’s largest copper producer, less vulnerable to turbulence in the commodities market.
Further dynamism is added to Chile’s economy through the government’s commitment to innovation and entrepreneurship. Schemes like StartUp Chile are all part of what will provide Chile with the economic diversity it needs in order to reach its target of becoming a truly developed economy by 2020.