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Chile vs. Bolivia

Economy

ChileBolivia
Economy - overview

Chile has a market-oriented economy characterized by a high level of foreign trade and a reputation for strong financial institutions and sound policy that have given it the strongest sovereign bond rating in South America. Exports of goods and services account for approximately one-third of GDP, with commodities making up some 60% of total exports. Copper is Chile's top export and provides 20% of government revenue.

From 2003 through 2013, real growth averaged almost 5% per year, despite a slight contraction in 2009 that resulted from the global financial crisis. Growth slowed to an estimated 1.4% in 2017. A continued drop in copper prices prompted Chile to experience its third consecutive year of slow growth.

Chile deepened its longstanding commitment to trade liberalization with the signing of a free trade agreement with the US, effective 1 January 2004. Chile has 26 trade agreements covering 60 countries including agreements with the EU, Mercosur, China, India, South Korea, and Mexico. In May 2010, Chile signed the OECD Convention, becoming the first South American country to join the OECD. In October 2015, Chile signed the Trans-Pacific Partnership trade agreement, which was finalized as the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) and signed at a ceremony in Chile in March 2018.

The Chilean Government has generally followed a countercyclical fiscal policy, under which it accumulates surpluses in sovereign wealth funds during periods of high copper prices and economic growth, and generally allows deficit spending only during periods of low copper prices and growth. As of 31 October 2016, those sovereign wealth funds - kept mostly outside the country and separate from Central Bank reserves - amounted to more than $23.5 billion. Chile used these funds to finance fiscal stimulus packages during the 2009 economic downturn.

In 2014, then-President Michelle BACHELET introduced tax reforms aimed at delivering her campaign promise to fight inequality and to provide access to education and health care. The reforms are expected to generate additional tax revenues equal to 3% of Chile's GDP, mostly by increasing corporate tax rates to OECD averages.

Bolivia is a resource rich country with strong growth attributed to captive markets for natural gas exports - to Brazil and Argentina. However, the country remains one of the least developed countries in Latin America because of state-oriented policies that deter investment.

Following an economic crisis during the early 1980s, reforms in the 1990s spurred private investment, stimulated economic growth, and cut poverty rates. The period 2003-05 was characterized by political instability, racial tensions, and violent protests against plans - subsequently abandoned - to export Bolivia's newly discovered natural gas reserves to large Northern Hemisphere markets. In 2005-06, the government passed hydrocarbon laws that imposed significantly higher royalties and required foreign firms then operating under risk-sharing contracts to surrender all production to the state energy company in exchange for a predetermined service fee; the laws engendered much public debate. High commodity prices between 2010 and 2014 sustained rapid growth and large trade surpluses with GDP growing 6.8% in 2013 and 5.4% in 2014. The global decline in oil prices that began in late 2014 exerted downward pressure on the price Bolivia receives for exported gas and resulted in lower GDP growth rates - 4.9% in 2015 and 4.3% in 2016 - and losses in government revenue as well as fiscal and trade deficits.

A lack of foreign investment in the key sectors of mining and hydrocarbons, along with conflict among social groups, pose challenges for the Bolivian economy. In 2015, President Evo MORALES expanded efforts to court international investment and boost Bolivia's energy production capacity. MORALES passed an investment law and promised not to nationalize additional industries in an effort to improve the investment climate. In early 2016, the Government of Bolivia approved the 2016-2020 National Economic and Social Development Plan aimed at maintaining growth of 5% and reducing poverty.

GDP (purchasing power parity)$459.134 billion (2019 est.)

$454.344 billion (2018 est.)

$437.082 billion (2017 est.)

note: data are in 2010 dollars
$100.445 billion (2019 est.)

$98.267 billion (2018 est.)

$94.285 billion (2017 est.)

note: data are in 2010 dollars
GDP - real growth rate1.03% (2019 est.)

4% (2018 est.)

1.41% (2017 est.)
2.22% (2019 est.)

4.23% (2018 est.)

4.19% (2017 est.)
GDP - per capita (PPP)$24,226 (2019 est.)

$24,259 (2018 est.)

$23,664 (2017 est.)

note: data are in 2010 dollars
$8,724 (2019 est.)

$8,656 (2018 est.)

$8,424 (2017 est.)

note: data are in 2010 dollars
GDP - composition by sectoragriculture: 4.2% (2017 est.)

industry: 32.8% (2017 est.)

services: 63% (2017 est.)
agriculture: 13.8% (2017 est.)

industry: 37.8% (2017 est.)

services: 48.2% (2017 est.)
Population below poverty line8.6% (2017 est.)37.2% (2019 est.)
Household income or consumption by percentage sharelowest 10%: 1.7%

highest 10%: 41.5% (2013 est.)
lowest 10%: 0.9%

highest 10%: 36.1% (2014 est.)
Inflation rate (consumer prices)2.2% (2019 est.)

2.7% (2018 est.)

2.1% (2017 est.)
1.8% (2019 est.)

2.2% (2018 est.)

2.8% (2017 est.)
Labor force7.249 million (2020 est.)5.719 million (2016 est.)
Labor force - by occupationagriculture: 9.2%

industry: 23.7%

services: 67.1% (2013)
agriculture: 29.4%

industry: 22%

services: 48.6% (2015 est.)
Unemployment rate7.22% (2019 est.)

7.33% (2018 est.)
4% (2017 est.)

4% (2016 est.)

note: data are for urban areas; widespread underemployment
Distribution of family income - Gini index44.4 (2017 est.)

57.1 (2000)
42.2 (2018 est.)

57.9 (1999)
Budgetrevenues: 57.75 billion (2017 est.)

expenditures: 65.38 billion (2017 est.)
revenues: 15.09 billion (2017 est.)

expenditures: 18.02 billion (2017 est.)
Industriescopper, lithium, other minerals, foodstuffs, fish processing, iron and steel, wood and wood products, transport equipment, cement, textilesmining, smelting, electricity, petroleum, food and beverages, handicrafts, clothing, jewelry
Industrial production growth rate-0.4% (2017 est.)2.2% (2017 est.)
Agriculture - productsgrapes, apples, wheat, sugar beet, milk, potatoes, tomatoes, maize, poultry, porksugar cane, soybeans, potatoes, maize, sorghum, rice, milk, plantains, poultry, bananas
Exports$90.626 billion (2019 est.)

$92.772 billion (2018 est.)

$88.376 billion (2017 est.)
$9.632 billion (2019 est.)

$9.81 billion (2018 est.)

$9.326 billion (2017 est.)
Exports - commoditiescopper, wood pulp, fish fillets, pitted fruits, wine (2019)natural gas, gold, zinc, soybean oil and soy products, tin, silver, lead (2019)
Exports - partnersChina 32%, United States 14%, Japan 9%, South Korea 7% (2019)Argentina 16%, Brazil 15%, United Arab Emirates 12%, India 10%, United States 6%, South Korea 5%, Peru 5%, Colombia 5% (2019)
Imports$87.505 billion (2019 est.)

$89.578 billion (2018 est.)

$83.01 billion (2017 est.)
$10.142 billion (2019 est.)

$9.99 billion (2018 est.)

$9.8 billion (2017 est.)
Imports - commoditiesrefined petroleum, crude petroleum, cars, broadcasting equipment, delivery trucks (2019)cars, refined petroleum, delivery trucks, iron, buses (2019)
Imports - partnersChina 24%, United States 20%, Brazil 8%, Germany 5%, Argentina 5% (2019)Brazil 22%, Chile 15%, China 13%, Peru 11%, Argentina 8%, United States 7% (2017)
Debt - external$193.298 billion (2019 est.)

$181.089 billion (2018 est.)
$12.81 billion (31 December 2017 est.)

$7.268 billion (31 December 2016 est.)
Exchange ratesChilean pesos (CLP) per US dollar -

738.81 (2020 est.)

770.705 (2019 est.)

674.25 (2018 est.)

658.93 (2014 est.)

570.37 (2013 est.)
bolivianos (BOB) per US dollar -

6.91 (2020 est.)

6.91 (2019 est.)

6.91 (2018 est.)

6.91 (2014 est.)

6.91 (2013 est.)
Fiscal yearcalendar yearcalendar year
Public debt23.6% of GDP (2017 est.)

21% of GDP (2016 est.)
49% of GDP (2017 est.)

44.9% of GDP (2016 est.)

note: data cover general government debt and includes debt instruments issued by government entities other than the treasury; the data include treasury debt held by foreign entities; the data include debt issued by subnational entities
Reserves of foreign exchange and gold$38.98 billion (31 December 2017 est.)

$40.49 billion (31 December 2016 est.)
$10.26 billion (31 December 2017 est.)

$10.08 billion (31 December 2016 est.)
Current Account Balance-$10.933 billion (2019 est.)

-$10.601 billion (2018 est.)
-$2.375 billion (2017 est.)

-$1.932 billion (2016 est.)
GDP (official exchange rate)$282.655 billion (2019 est.)$40.822 billion (2019 est.)
Credit ratingsFitch rating: A- (2020)

Moody's rating: A1 (2018)

Standard & Poors rating: A+ (2017)
Fitch rating: B (2020)

Moody's rating: B2 (2020)

Standard & Poors rating: B+ (2020)
Ease of Doing Business Index scoresOverall score: 72.6 (2020)

Starting a Business score: 91.4 (2020)

Trading score: 80.6 (2020)

Enforcement score: 64.7 (2020)
Overall score: 51.7 (2020)

Starting a Business score: 69.4 (2020)

Trading score: 71.6 (2020)

Enforcement score: 55.6 (2020)
Taxes and other revenues20.8% (of GDP) (2017 est.)39.9% (of GDP) (2017 est.)
Budget surplus (+) or deficit (-)-2.8% (of GDP) (2017 est.)-7.8% (of GDP) (2017 est.)
Unemployment, youth ages 15-24total: 19.6%

male: 19.1%

female: 20.3% (2019 est.)
total: 8.8%

male: 8.2%

female: 9.7% (2019 est.)
GDP - composition, by end usehousehold consumption: 62.3% (2017 est.)

government consumption: 14% (2017 est.)

investment in fixed capital: 21.5% (2017 est.)

investment in inventories: 0.5% (2017 est.)

exports of goods and services: 28.7% (2017 est.)

imports of goods and services: -27% (2017 est.)
household consumption: 67.7% (2017 est.)

government consumption: 17% (2017 est.)

investment in fixed capital: 21.3% (2017 est.)

investment in inventories: 3.8% (2017 est.)

exports of goods and services: 21.7% (2017 est.)

imports of goods and services: -31.3% (2017 est.)
Gross national saving18.9% of GDP (2019 est.)

18.6% of GDP (2018 est.)

18.9% of GDP (2017 est.)
14.2% of GDP (2019 est.)

16.1% of GDP (2018 est.)

16.1% of GDP (2017 est.)

Source: CIA Factbook