Chile’s latest Economic Activity YoY reading for December 2025, released on December 1, shows a growth rate of 2.20%, down from 3.20% in November. This figure is slightly below the 12-month average of 2.30%, indicating a modest slowdown in economic momentum. The data, sourced from the Sigmanomics database, covers the entire Chilean economy and reflects year-over-year changes in aggregate activity.

Drivers this month

• Domestic consumption growth slowed amid higher interest rates.
• Mining output remained stable but showed no acceleration.
• Export volumes faced headwinds from weaker external demand.

Policy pulse

The Central Bank of Chile’s monetary tightening cycle, with policy rates rising to 11.25%, continues to weigh on credit growth and investment. Inflation remains above target at around 4.50%, prompting cautious stance from policymakers.

Market lens

Financial markets reacted mildly: the Chilean peso (CLPUSD) depreciated 0.30% within the first hour, reflecting cautious sentiment. Sovereign bond yields edged up by 5 basis points, signaling moderate risk repricing.

Chile’s economic activity growth of 2.20% YoY contrasts with the 6.60% peak seen in February 2025 and the negative dip of -0.10% in April 2025. The recent moderation aligns with a broader global slowdown and domestic tightening. Key macro indicators provide context:

Inflation & Employment

• Inflation remains sticky at 4.50%, above the Central Bank’s 3% target.
• Unemployment rate steady at 7.10%, with labor market slack persisting.

Monetary Policy & Financial Conditions

• Policy rate at 11.25%, unchanged since October 2025.
• Credit growth slowed to 3.50% YoY from 5.00% six months ago.

Fiscal Policy & Government Budget

• Fiscal deficit narrowed to 1.80% of GDP in Q3 2025, down from 3.00% in 2024.
• Government continues gradual consolidation amid social spending pressures.

Drivers this month

• Mining sector output stable but no growth acceleration.
• Manufacturing and services sectors slowed due to weaker demand.
• Consumer spending growth moderated amid tighter credit.

Market lens

Immediate reaction: The Chilean peso weakened 0.30% against the USD, while 2-year sovereign yields rose 5 basis points, reflecting investor caution about growth prospects.

Looking ahead, Chile’s economic trajectory depends on several factors. We outline three scenarios with associated probabilities:

Bullish scenario (25%)

• Global demand recovers, boosting exports and mining output.
• Inflation eases faster, allowing monetary policy to pause or ease.
• Fiscal consolidation supports confidence without stifling growth.
• Economic activity rebounds to 3.50%-4.00% YoY by mid-2026.

Base scenario (50%)

• Moderate global growth with persistent inflationary pressures.
• Monetary policy remains tight, slowing credit and investment.
• Fiscal policy remains cautious, balancing consolidation and social needs.
• Growth stabilizes around 2.00%-2.50% YoY through 2026.

Bearish scenario (25%)

• External shocks worsen (commodity price drops, geopolitical tensions).
• Inflation remains elevated, forcing further monetary tightening.
• Fiscal pressures increase, limiting government support.
• Economic activity slows below 1.00%, risking recession.

Policy pulse

The Central Bank’s cautious stance will be critical. Any signs of inflation persistence could trigger further hikes, while a sharper slowdown might prompt a pivot.

Chile’s December 2025 Economic Activity YoY reading signals a moderate slowdown amid tightening monetary conditions and external uncertainties. The economy remains resilient compared to the sharp contraction in early 2025 but faces headwinds from subdued domestic demand and global risks. Policymakers must balance inflation control with growth support, while fiscal discipline remains essential. Financial markets are pricing in cautious optimism but remain sensitive to geopolitical developments and commodity price volatility.

Market lens

Investor sentiment will hinge on upcoming inflation data and global trade dynamics. The Chilean peso and sovereign bonds are likely to remain volatile as markets digest evolving risks.

Key Markets Likely to React to Economic Activity YoY

Chile’s economic activity data typically influences local equities, currency, and sovereign bonds. The following tradable symbols historically track or react to these macro shifts:

• BSANTANDER – Major bank with exposure to Chile’s credit cycle and economic health.
• CLPUSD – Chilean peso vs. USD, sensitive to growth and monetary policy.
• COPEC – Energy sector leader, linked to domestic demand and commodity prices.
• BTCUSD – Bitcoin, often a risk sentiment barometer impacting emerging markets.
• USDMXN – Mexican peso vs. USD, a regional currency proxy for Latin American risk appetite.

FAQs

What does Chile’s Economic Activity YoY indicate?

Chile’s Economic Activity YoY measures the annual growth rate of the country’s overall economic output, reflecting health and momentum.

How does monetary policy affect Chile’s economic activity?

Tightening monetary policy raises borrowing costs, slowing consumption and investment, which can reduce economic growth.

Why is external demand important for Chile’s economy?

Chile is a commodity exporter; global demand influences export volumes, impacting GDP growth and currency strength.

Chile’s economic activity is moderating amid tighter policy and external risks, requiring vigilant policy calibration to sustain growth and control inflation.

This has been drafted with AI assistance and then thoroughly reviewed, refined, and approved by our human editorial team to ensure accuracy, and originality.

Updated 12/1/25