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Chile vs. Peru

Economy

ChilePeru
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.

Peru's economy reflects its varied topography - an arid lowland coastal region, the central high sierra of the Andes, and the dense forest of the Amazon. A wide range of important mineral resources are found in the mountainous and coastal areas, and Peru's coastal waters provide excellent fishing grounds. Peru is the world's second largest producer of silver and copper.

The Peruvian economy grew by an average of 5.6% per year from 2009-13 with a stable exchange rate and low inflation. This growth was due partly to high international prices for Peru's metals and minerals exports, which account for 55% of the country's total exports. Growth slipped from 2014 to 2017, due to weaker world prices for these resources. Despite Peru's strong macroeconomic performance, dependence on minerals and metals exports and imported foodstuffs makes the economy vulnerable to fluctuations in world prices.

Peru's rapid expansion coupled with cash transfers and other programs have helped to reduce the national poverty rate by over 35 percentage points since 2004, but inequality persists and continued to pose a challenge for the Ollanta HUMALA administration, which championed a policy of social inclusion and a more equitable distribution of income. Poor infrastructure hinders the spread of growth to Peru's non-coastal areas. The HUMALA administration passed several economic stimulus packages in 2014 to bolster growth, including reforms to environmental regulations in order to spur investment in Peru’s lucrative mining sector, a move that was opposed by some environmental groups. However, in 2015, mining investment fell as global commodity prices remained low and social conflicts plagued the sector.

Peru's free trade policy continued under the HUMALA administration; since 2006, Peru has signed trade deals with the US, Canada, Singapore, China, Korea, Mexico, Japan, the EU, the European Free Trade Association, Chile, Thailand, Costa Rica, Panama, Venezuela, Honduras, concluded negotiations with Guatemala and the Trans-Pacific Partnership, and begun trade talks with El Salvador, India, and Turkey. Peru also has signed a trade pact with Chile, Colombia, and Mexico, called the Pacific Alliance, that seeks integration of services, capital, investment and movement of people. Since the US-Peru Trade Promotion Agreement entered into force in February 2009, total trade between Peru and the US has doubled. President Pedro Pablo KUCZYNSKI succeeded HUMALA in July 2016 and is focusing on economic reforms and free market policies aimed at boosting investment in Peru. Mining output increased significantly in 2016-17, which helped Peru attain one of the highest GDP growth rates in Latin America, and Peru should maintain strong growth in 2018. However, economic performance was depressed by delays in infrastructure mega-projects and the start of a corruption scandal associated with a Brazilian firm. Massive flooding in early 2017 also was a drag on growth, offset somewhat by additional public spending aimed at recovery efforts.

GDP (purchasing power parity)
$452.1 billion (2017 est.)
$445.5 billion (2016 est.)
$439.9 billion (2015 est.)

note: data are in 2017 dollars

$430.3 billion (2017 est.)
$420 billion (2016 est.)
$403.7 billion (2015 est.)

note: data are in 2017 dollars

GDP - real growth rate
1.03% (2019 est.)
4% (2018 est.)
1.41% (2017 est.)
2.18% (2019 est.)
3.97% (2018 est.)
2.48% (2017 est.)
GDP - per capita (PPP)
$24,600 (2017 est.)
$24,500 (2016 est.)
$24,400 (2015 est.)

note: data are in 2017 dollars

$13,500 (2017 est.)
$13,300 (2016 est.)
$13,000 (2015 est.)

note: data are in 2017 dollars

GDP - composition by sector
agriculture: 4.2% (2017 est.)
industry: 32.8% (2017 est.)
services: 63% (2017 est.)
agriculture: 7.6% (2017 est.)
industry: 32.7% (2017 est.)
services: 59.9% (2017 est.)
Population below poverty line
14.4% (2013)
22.7% (2014 est.)
Household income or consumption by percentage share
lowest 10%: 1.7%
highest 10%: 41.5% (2013 est.)
lowest 10%: 1.4%
highest 10%: 36.1% (2010 est.)
Inflation rate (consumer prices)
2.2% (2017 est.)
3.8% (2016 est.)
2.8% (2017 est.)
3.6% (2016 est.)

note: data are for metropolitan Lima, annual average

Labor force
7.249 million (2020 est.)
3.421 million (2020 est.)

note: individuals older than 14 years of age

Labor force - by occupation
agriculture: 9.2%
industry: 23.7%
services: 67.1% (2013)
agriculture: 25.8%
industry: 17.4%
services: 56.8% (2011)
Unemployment rate
7.22% (2019 est.)
7.33% (2018 est.)
6.58% (2019 est.)
6.73% (2018 est.)

note: data are for metropolitan Lima; widespread underemployment

Distribution of family income - Gini index
50.5 (2013)
57.1 (2000)
45.3 (2012)
51 (2005)
Budget
revenues: 57.75 billion (2017 est.)
expenditures: 65.38 billion (2017 est.)
revenues: 58.06 billion (2017 est.)
expenditures: 64.81 billion (2017 est.)
Industries
copper, lithium, other minerals, foodstuffs, fish processing, iron and steel, wood and wood products, transport equipment, cement, textiles
mining and refining of minerals; steel, metal fabrication; petroleum extraction and refining, natural gas and natural gas liquefaction; fishing and fish processing, cement, glass, textiles, clothing, food processing, beer, soft drinks, rubber, machinery, electrical machinery, chemicals, furniture
Industrial production growth rate
-0.4% (2017 est.)
2.7% (2017 est.)
Agriculture - products
grapes, apples, pears, onions, wheat, corn, oats, peaches, garlic, asparagus, beans; beef, poultry, wool; fish; timber
artichokes, asparagus, avocados, blueberries, coffee, cocoa, cotton, sugarcane, rice, potatoes, corn, plantains, grapes, oranges, pineapples, guavas, bananas, apples, lemons, pears, coca, tomatoes, mangoes, barley, medicinal plants, quinoa, palm oil, marigolds, onions, wheat, dry beans; poultry, beef, pork, dairy products; guinea pigs; fish
Exports
$69.23 billion (2017 est.)
$60.6 billion (2016 est.)
$44.92 billion (2017 est.)
$37.02 billion (2016 est.)
Exports - commodities
copper, fruit, fish products, paper and pulp, chemicals, wine
copper, gold, lead, zinc, tin, iron ore, molybdenum, silver; crude petroleum and petroleum products, natural gas; coffee, asparagus and other vegetables, fruit, apparel and textiles, fishmeal, fish, chemicals, fabricated metal products and machinery, alloys
Exports - partners
China 27.5%, US 14.5%, Japan 9.3%, South Korea 6.2%, Brazil 5% (2017)
China 26.5%, US 15.2%, Switzerland 5.2%, South Korea 4.4%, Spain 4.1%, India 4.1% (2017)
Imports
$61.31 billion (2017 est.)
$55.29 billion (2016 est.)
$38.65 billion (2017 est.)
$35.13 billion (2016 est.)
Imports - commodities
petroleum and petroleum products, chemicals, electrical and telecommunications equipment, industrial machinery, vehicles, natural gas
petroleum and petroleum products, chemicals, plastics, machinery, vehicles, TV sets, power shovels, front-end loaders, telephones and telecommunication equipment, iron and steel, wheat, corn, soybean products, paper, cotton, vaccines and medicines
Imports - partners
China 23.9%, US 18.1%, Brazil 8.6%, Argentina 4.5%, Germany 4% (2017)
China 22.3%, US 20.1%, Brazil 6%, Mexico 4.4% (2017)
Debt - external
$183.4 billion (31 December 2017 est.)
$158.1 billion (31 December 2016 est.)
$66.25 billion (31 December 2017 est.)
$66.76 billion (31 December 2016 est.)
Exchange rates
Chilean pesos (CLP) per US dollar -
653.9 (2017 est.)
676.94 (2016 est.)
676.94 (2015 est.)
658.93 (2014 est.)
570.37 (2013 est.)
nuevo sol (PEN) per US dollar -
3.265 (2017 est.)
3.3751 (2016 est.)
3.3751 (2015 est.)
3.185 (2014 est.)
2.8383 (2013 est.)
Fiscal year
calendar year
calendar year
Public debt
23.6% of GDP (2017 est.)
21% of GDP (2016 est.)
25.4% of GDP (2017 est.)
24.5% of GDP (2016 est.)

note: data cover general government debt, and includes debt instruments issued by government entities other than the treasury; the data exclude 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.)
$63.83 billion (31 December 2017 est.)
$61.81 billion (31 December 2016 est.)
Current Account Balance
-$10.933 billion (2019 est.)
-$10.601 billion (2018 est.)
-$3.531 billion (2019 est.)
-$3.821 billion (2018 est.)
GDP (official exchange rate)
$277 billion (2017 est.)
$214.2 billion (2017 est.)
Stock of direct foreign investment - at home
$206.2 billion (31 December 2017 est.)
$199.8 billion (31 December 2016 est.)
$98.24 billion (31 December 2017 est.)
$91.48 billion (31 December 2016 est.)
Stock of direct foreign investment - abroad
$95.37 billion (31 December 2017 est.)
$90.54 billion (31 December 2016 est.)
$5.447 billion (31 December 2017 est.)
$4.255 billion (31 December 2016 est.)
Market value of publicly traded shares
$190.4 billion (31 December 2015 est.)
$233.2 billion (31 December 2014 est.)
$265.2 billion (31 December 2013 est.)
$56.56 billion (31 December 2015 est.)
$78.84 billion (31 December 2014 est.)
$80.98 billion (31 December 2013 est.)
Central bank discount rate
3.35% (31 December 2015)
3% (31 December 2014)
4.25% (31 December 2016 est.)
5.05% (31 December 2012)
Commercial bank prime lending rate
4.6% (31 December 2017 est.)
5.59% (31 December 2016 est.)
16.6% (31 December 2017 est.)
16.47% (31 December 2016 est.)

note: domestic currency lending rate, 90 day maturity

Stock of domestic credit
$244.3 billion (31 December 2017 est.)
$211.6 billion (31 December 2016 est.)
$56.7 billion (31 December 2017 est.)
$52.8 billion (31 December 2016 est.)
Stock of narrow money
$52.54 billion (31 December 2017 est.)
$44.01 billion (31 December 2016 est.)
$33.41 billion (31 December 2017 est.)
$31.08 billion (31 December 2016 est.)
Stock of broad money
$52.54 billion (31 December 2017 est.)
$44.01 billion (31 December 2016 est.)
$33.41 billion (31 December 2017 est.)
$31.08 billion (31 December 2016 est.)
Taxes and other revenues
20.8% (of GDP) (2017 est.)
27.1% (of GDP) (2017 est.)
Budget surplus (+) or deficit (-)
-2.8% (of GDP) (2017 est.)
-3.1% (of GDP) (2017 est.)
Unemployment, youth ages 15-24
total: 18.1%
male: 16.7%
female: 20.2% (2018 est.)
total: 14.7%
male: 14.3%
female: 15% (2018 est.)
GDP - composition, by end use
household 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: 64.9% (2017 est.)
government consumption: 11.7% (2017 est.)
investment in fixed capital: 21.7% (2017 est.)
investment in inventories: -0.2% (2017 est.)
exports of goods and services: 24% (2017 est.)
imports of goods and services: -22% (2017 est.)
Gross national saving
20.5% of GDP (2017 est.)
20.9% of GDP (2016 est.)
21.4% of GDP (2015 est.)
19.8% of GDP (2017 est.)
19.5% of GDP (2016 est.)
19% of GDP (2015 est.)

Source: CIA Factbook