Chile Country Risk Rating

Overall risk in Chile continues to be assessed as medium-low, following a sharp shift to the right in another political transition. Public frustration over rising crime, increased migration and weak economic stimulus have ultimately led to conservative candidate José Antonio Kast’s 58% victory over the leftist coalition opposition. Sworn in on March 11 2026, President Kast’s economic plans involve the flexibility of labor laws, cuts in corporate tax, less regulation and encouraging investment into Chile’s well-renowned copper industry. Political violence and political interference, both remain medium-low. Despite Chile being considered one of the safest countries in Latin America, fears over crimes, organized gangs and immigration have risen in recent years - issues Kast is attempting to address. One of Kast’s proposals is already underway, with trenches being dug along Chile’s northern border with Peru in efforts to crack down on illegal migration and unauthorized entries. The President has also expressed ambitions to create a specialized enforcement body similar to the U.S.’s Immigration and Custom Enforcement. In terms of international relations, Chile have reaffirmed their close ties with the U.S., signing mining and security agreements in late April. The security deal, in particular, aims to strengthen capacity to address the ongoing drug-trafficking crisis and includes USD 1 mln in allocated security funding from the U.S. Additionally, ties are expected to be maintained with China given Chile’s reliance on China’s imports, particularly in copper, and exports. Legal & regulatory risk is considered to have a rating of medium-low.

In terms of the Chilean economy, the IMF’s updated April 2026 outlook highlights the country’s resilient GDP performance despite global headwinds, projecting growth of 2.4% in 2026 and 2.6% in 2027. These outcomes of course depend on changes in external conditions. The world’s largest copper producer and second largest-lithium producer have been benefiting from the inflated copper prices since the U.S. initiated its conflict with Iran. However, Chile is also one of the largest importers of oil in Latin America due to limited domestic production, creating significant economic headwinds.   Inflation is more than likely to exceed the IMF’s 2.9% 2026 forecast as well into early 2027, given the current uncertainty surrounding oil prices at this current point in time. In the light of this, Chile’s Central Bank held its policy rate at 4.5% in its late April meeting, stating that the ongoing conflict in the Middle East is worsening the forecast for economic activity and inflation. The risk of doing business is currently rated at medium low. Similarly, exchange transfer and sovereign non-payment risk both are a medium-low risk rating, with the IMF forecasting government debt to GDP to reach 42.5% in 2026 and 44.4% in 2027. The debt ratio is expected to rise steadily through to 2031.