Chile's central bank sharply cuts its 2026 growth forecast

According to the outlet BioBioChile, Chile's central bank has sharply reduced its economic growth estimate for 2026. The bank cut its forecast for gross domestic product (GDP) expansion this year to a range of 0.25% to 0.75%, a notable decline from the 1% to 1.75% range it had projected in June.

The slowdown reflects a loss of momentum in domestic demand, a broad weakening of activity and a deterioration in labor market indicators. Added to this is the impact of higher fuel prices, which raise transport and production costs, directly reducing household and business disposable income and ultimately cooling consumption.

To put these figures in perspective, the Chilean economy's performance has varied in recent years. According to historical data from the International Monetary Fund, Chile's real GDP grew 0.5% in 2023, rose to 2.6% in 2024 and reached 2.3% in 2025. For the following years, the international agency projects growth of 2.4% for 2026 and 2.6% for 2027.

Despite the difficult outlook for this year, the central bank expects a recovery from 2027, supported by the investment boost that the Reconstruction Law would generate. The bank projects GDP will grow between 2% and 3% in 2027, while for 2028 it estimates expansion of between 2.25% and 3.25% (compared with the June range, which had a ceiling of 2.75% for that year). On prices, annual inflation is around 4%, while inflation excluding the most volatile components remains between 3.2% and 3.4%.