Chile’s economic growth slows in 2025 despite fourth-quarter rebound

Chile’s economy grew more slowly in 2025 than in the previous year, despite returning to growth in the fourth ​quarter.

Full-year GDP expanded 2.5%, central bank data showed on Wednesday (March 19), down ​from a revised 2.8% in 2024.

“The figure still falls short ⁠of Chilean families’ expectations,” the Finance Ministry said in a statement.

President Jose Antonio ​Kast took office last week, vowing to stamp out what he calls the ​fiscal mismanagement left behind by leftist predecessor Gabriel Boric.

Still, the economy was supported by domestic demand in 2025, and grew slightly faster than the 2.4% forecast by the central ​bank.

Kast aims to leave office with economic growth at around 4%, Deputy ​Finance Minister Juan Pablo Rodriguez said in the statement, despite plans to slash public spending.

The ‌government’s ⁠program to improve public finances would include spending cuts of nearly $4 billion, with the first measures expected to be carried out this month.

“The energy price spike and fiscal tightening planned under President Kast will cause the economy to weaken ​in the coming ​quarters,” Capital Economics ⁠analyst Kimberley Sperrfechter said.

In 2026, Chile’s economy is expected to grow 2.4%, according to the latest government estimates.

In the fourth ​quarter, Chile’s economy grew 0.6% from the previous quarter, ​central bank ⁠data showed, rebounding from a revised 0.3% contraction in the third quarter.

That was above the 0.3% quarter-on-quarter increase forecast by economists in a Reuters poll.

Mining output ⁠in the ​quarter rose 0.4%, the central bank said.

From ​a year earlier, GDP grew 1.6% in the fourth quarter, compared with economists’ forecast of 1.7%.

Reporting ​by Aida Pelaez-Fernandez and Fabian Cambero for Reuters

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