Despite the global economic downturn, Chile’s economy is gaining major ground. According to the country’s Finance Minister Felipe Larraín, Chile is expected to reach developed-nation status even earlier than analysts had expected.
Because of the country’s falling unemployment, rising wages, and investment growth, Chile’s economy is expanding faster than expected – even while Europe and the United States struggle, he said.
Meeting development goals
President Sebastián Piñera set a major economic goal for Chile, aiming for the country to reach developed-nation status by 2018 – which would make Chile the first Latin American country to reach the important landmark. Chile’s current annual growth rate is above 5 percent, and if the country can keep up the trend, it will reach this important milestone even earlier than 2018.
According to Bloomberg, Chile’s economy was one of the 10 fastest growing in the world for the first six months of 2012.
Unemployment in Chile fell to 6.5 percent in the third quarter of 2012 down from 7.4 percent the year earlier, and investment growth accelerated to 8 percent in the second quarter, based on information from the government and central bank.
According to Cesar Perez-Novoa, co-head of research at BTG Pactual, these positive elements are moving Chile closer towards its goal.
“Chile is rapidly moving toward becoming a developed country based on tremendous growth in the economy and the labor market,” Perez-Novoa said.
Another positive factor affecting Chile’s growth is its reputation as a stable and reliable place to invest. The Corruption Perceptions Index 2012 recently declared Chile the least corrupt country in Latin America (tied with Uruguay), and ranked 20th in the world. This excellent grade is based on research by local and foreign analysts and organizations, and relates to a grading system that gives countries a score from 0 (highly corrupt) to 100 (very clean).