Population 18,8 million
GDP 15,902 US$
Country risk assessment
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major macro economic indicators

  2017 2018 2019 (e) 2020 (f)
GDP growth (%) 1.3 4.0 1.0 -4.5
Inflation (yearly average, %) 2.2 2.3 2.5 3.0
Budget balance (% GDP) -2.7 -1.6 -2.3 -2.0
Current account balance (% GDP) -2.1 -3.1 -3.5 -3.2
Public debt (% GDP) 23.5 25.6 27.5 29.2


(e): Estimate. (f): Forecast.


  • Mining (leading copper producer), agricultural, fishery and forestry resources
  • Numerous free-trade agreements
  • Flexible monetary, fiscal and exchange rate policies
  • Member of the OECD and the Pacific Alliance


  • Small and open economy vulnerable to external shocks given the dependence on copper and on Chinese demand
  • Exposure to climatic and earthquake risks
  • Inadequate research and innovation
  • Income and wealth disparity, poor education and health systems

Risk assessment

Activity to remain lacklustre

GDP growth slowed down in 2019, majorly impacted by the deterioration of the global risk scenario (US-China trade war escalation and decelerating activity in China), the temporary disruptions to the mining sector and, especially, the social upheaval triggered in October 2019. The latter caused deep side effects on sectors such as retail and transport. In 2020, activity is likely to remain lacklustre. On the one hand, supportive fiscal and monetary policies (real policy rate in negative field at end-2019) will contribute positively to the economy. Budget-wise, following the Q4 2019 protests, the government announced a USD 5.5 billion (roughly 2% of GDP) fiscal stimulus package out of which USD 3 billion will be allocated to stimulate activity and employment by increasing investment expenditure, and the remainder will be dedicated to reconstruction efforts of public infrastructure. But, on the other hand, confidence indexes, which have strongly eroded since the protests started, and the deteriorating job market will prevent a stronger economic momentum (thus household consumption and private investments will remain weak). Finally, further escalation of trade tensions would represent another downside risk. Copper prices would be under pressure, affecting the small Chilean open economy for which copper represents roughly 10% of GDP, 25% of fiscal revenues and 50% of exports.


External vulnerability has increased amid lower global activity

The current account deficit was still wide in 2019, mainly explained by the trade balance, which remained hampered by the weak global trade environment that has hit copper demand and prices. This year, the current account deficit should significantly narrow due to weak domestic demand and the relatively more depreciated exchange rate, which will both weigh on imports. Alongside, foreign direct investment should still be enough to cover the external deficit (albeit the former should be somewhat impacted by the deterioration in the political environment triggered by the 2019 social unrest). Moreover, the country´s external debt has significantly increased in the last decade. Currently it stands at around 72% of GDP, over 70% of which is owed by the private sector (22% by banks and financial institutions, 78% by non-financial companies). Nevertheless, Chile´s negative net international investment position is still at moderate level, at roughly -24.3% of GDP as of September 2019, mainly smoothed by the existence of relevant pension funds’ investments abroad (about 30.7% of GDP as of September 2019). Finally, the country has a high level of foreign exchange reserves (covering roughly 7 months of imports and representing 14% of GDP). In November 2019, the central bank announced that it could sell up to USD 20 billion in order to smooth depreciation pressures on the Chilean peso (to last through May 2020).

Regarding the fiscal framework, a loosening policy is expected in 2020, as a consequence of the USD 5.5 billion fiscal package announced in December 2019. In fact, the government has formally given up reducing the structural balance to 1% in 2022 (the revised 2020 structural deficit is now at 3% of GDP, up from the previous 1.7% estimate). Moreover, policymakers now see public debt stabilizing at roughly 38% of GDP by 2024, up from the 30% forecasted before.


Social discontent is a key challenge for the government

President Sebastián Piñera of the centre-right Chile Vamos coalition has experienced an acute drop in popularity, driven by the economic slowdown, higher living costs and the perception that the government has been inefficient in solving social demands. Despite the Chilean economy having relatively sound economic fundamentals, there is a deep discontent over still high inequality, low pension levels and precarious access to health and education. Indeed, in October 2019, these factors contributed to trigger the most intense social unrest since the return to democracy. What began as a student protest against rising transportation charges quickly turned into confrontation with public forces, damage of public infrastructure, and ultimately of the economy. Furthermore, the government also showed little skill and empathy in the management of the conflict.

Dealing with the population’s longings will remain a key challenge for the government. In response to the protestors’ demand, a referendum will be held on April 26 2020 on whether the country should draft a new constitution to replace the one imposed in the 1980s by the Pinochet dictatorship. In this occasion, Chileans will be asked if they want a new constitution, and if they want it to be drafted by a constitutional Convention (made up of citizens elected for this purpose), or a mixed constitutional convention (made up in halves by currently-sitting members of Parliament and directly-elected citizens). If the population votes for a new constitution, a second vote on 25 October 2020 would elect the members of the constitutional convention, and a third vote would accept or reject the new constitution after it is drafted, which is expected to occur in March 2022 at the latest.


Last update: February 2020


Promissory notes, cheques and bills of exchange are frequently used for commercial transactions in Chile. In an event of default, it offers creditors some safeguards, including access to the summary proceeding (Juicio Ejecutivo). Under a juicio ejecutivo, based on his appraisal of the documents submitted, a first instance judge (Juzgado Civil) may order a debtor to pay at the moment of the notification – if the debtor fails to do so, his property will be seized. These documents may need to be validated by court before becoming legally enforceable.

Bills of exchange that are guaranteed by a bank are widely accepted, though somewhat difficult to obtain. They limit the risk of payment default by offering creditor additional recourse to the endorser of the bill.

Cheques, which are used more often than bills of exchange or promissory notes, offer similar legal safeguards under Juicio Ejecutivo in the event of unpaid for a cause (protesto), uncovered cheques, or closed accounts. Checks and the other mentioned documents, if not paid on time, can be reported to a Credit Report Company called Boletin Comercial.

The same is true of the promissory note (pagaré), which − like bills of exchange and cheques – is an instrument enforceable by law and, when unpaid, may also be recorded at Boletín Comercial (see below). The promissory note needs to be validated (protestada) by a public notary or in a judicial trial.

The Boletín Comercial is a company dedicated to conducting financial risk analysis. It provides to other information companies (such as Dicom, SIISA) information about the debts registered at national level for all kind of debtors. Boletín Comercial is the official and most important company, on this matter, at national level under the authority of the Santiago Chamber of Commerce (Cámara de Comercio de Santiago). Both, Companies and individuals, can be registered as debtors in the Boletin Comercial. The register provides key financial information that can be consulted by anyone who is interested in obtaining a picture of the financial behaviour of a Company or individual.

Electronic transfers via the SWIFT network, widely used by Chilean banks, are a quick, fairly reliable, and cheap instrument.

Debt Collection

Amicable phase

Collection begins with an amicable collection process where parties can agree on a payment settlement or other payment plan. The length of this amicable phase depends on the predefined term of the documents supporting the debt (cheque, invoice, promissory note, bill of exchange). A formal notice is sent by a recorded delivery letter inviting the debtor to pay.

If the parties did not include any specific clauses in the commercial contract, the applicable rate for delays on the payment is the conventional interest rate as defined by the central bank of Chile on a periodical basis.


Ordinary proceedings

When a settlement agreement cannot be reached with the debtor, the creditor will initiate a legal collection process ruled by local civil procedure.

Aside from the Juicio Ejecutivo creditors who are unable to settle with their debtors out of court may enforce their right to payment through the corresponding legal action ruled by the civil procedure. According to the local procedural laws, there are two kinds of judicial collection procedures; i), ordinary proceedings (Juicio Ordinario); ii) and abbreviated proceeding (Juicio Sumario) depending on the value of the sued amount and the type of documents that support the debt.

The claimant needs to explain the basis for their legal action and enclose all supporting documents (original copies) and evidence. After the first presentation in court, the judge will decide whether the legal action has basis or not. If the judge considers there are enough arguments and evidence, he will give course to the process.

All judicial action needs the presence of a barrister or solicitor (lawyer), whether taking place in front of a minor court (Juzgados – primera instancia) or superior court (Corte Apelaciones o Suprema − segunda instancia).

Debtors can dispute ruling with motivated arguments that law contains at the Código de Procedimiento Civil (Civil Procedure Code, defences) such as payment of debt, prescription, compensation, etc. Judges will consider these arguments and will accept or reject the defence. It is important to note that, while the defences of the debtor are discussed by the parties in the trial, the steps relating to seizure of assets are not stayed. The idea of this is that the debtor cannot delay the procedure unnecessarily.

Trials can last from six months up to two years, depending on the document, the debtor’s defence, and if an appeal is filed following the initial judgement.

Enforcement of a Legal Decision

Domestic judgments are enforceable when all appeals have been exhausted. If the debtor fails to comply with the decision, the court can order an auction of the debtor’s assets. Collection from a third party owing to the debtor is not possible.

Foreign judgments may be enforced if the Supreme Court validates these through an exequatur proceeding. Chilean law only recognises foreign judgements on a reciprocity basis: the issuing country must have an agreement with Chile regarding recognition and enforcement of legal decisions. Proceedings can last from between one to two years and the amounts to recover decrease because it is not possible to request the restitution of taxes paid to the treasury, which national companies can require.

Insolvency Proceedings

Out-of court proceedings

Extra-judicial reorganization

The 2014 bankruptcy law recognizes agreements between creditors and debtors that are reached outside of a bankruptcy proceeding, whereby a court approves the agreement that was developed outside of the bankruptcy court. In order to be approved, two or more creditors whose claims represent at least 75% of the total claims corresponding to their respective group must accept the plan.

Chilean law distinguishes different categories of creditors during a bankruptcy process, e.g. employees owned money, creditors that have a mortgage (usually banks), etc. Creditors in these categories have preference for payment over others. If creditors do not meet the criteria to be part of these categories, they do not receive have any kind of preference for payment.

While considering the approval of said plan, the court stays the procedure and the legal actions against the debtor. However, during this time also, the debtor is prohibited from disposing of any of its assets. After approval, the plan has the same effect as a judicial reorganization.


Restructuring proceedings

Restructuring processes carried out without a formal bankruptcy process are also carried out through a court trial at the request of the creditor(s). In the event that the debtor is not able to reorganize his debt through any agreement or negotiation, creditors may request the liquidation of the company.


Judicial reorganization

These agreements are more formal than extra-judicial agreements, and can only be filed by debtors, as they have to declare their insolvency to the court. The proceedings apply to both secured and unsecured creditors. Once debtors enter the judicial reorganization process, they must subsequently propose a reorganization plan, which requires the approval of at least two thirds of the total number of creditors.



Liquidation is organized through a single procedure initiated upon demand of the debtor or creditors. The latter can file for bankruptcy when a debtor defaults without appointing an administrator for its business. Once bankruptcy is declared, a trustee is given responsibility for the debtors’ business and assets.