Economy Chile
Economy - overview: Chile has a market-oriented economy characterized by a high level of foreign trade. During the early 1990s, Chile's reputation as a role model for economic reform was strengthened when the democratic government of Patricio AYLWIN - which took over from the military in 1990 - deepened the economic reform initiated by the military government. Growth in real GDP averaged 8% during 1991-97, but fell to half that level in 1998 because of tight monetary policies implemented to keep the current account deficit in check and because of lower export earnings - the latter a product of the global financial crisis. A severe drought exacerbated the recession in 1999, reducing crop yields and causing hydroelectric shortfalls and electricity rationing, and Chile experienced negative economic growth for the first time in more than 15 years. Despite the effects of the recession, Chile maintained its reputation for strong financial institutions and sound policy that have given it the strongest sovereign bond rating in South America. By the end of 1999, exports and economic activity had begun to recover, and growth rebounded to 5.4% in 2000. Unemployment remains stubbornly high, however, putting pressure on President LAGOS to improve living standards. The Argentine financial meltdown has put pressure on the Chilean peso and is slowing the country's economic growth. Meanwhile, Chile and the US are conducting negotiations for a free trade agreement.
GDP: purchasing power parity - $153 billion (2001 est.)
GDP - real growth rate: 3.1% (2001 est.)
GDP - per capita: purchasing power parity - $10,000 (2001 est.)
GDP - composition by sector: agriculture: 8% industry: 38% services: 54% (2000)
Population below poverty line: 22% (1998 est.)
Household income or consumption by percentage share: lowest 10%: 1.2% highest 10%: 41.3% (1998)
Distribution of family income - Gini index: 57.5 (1996)
Inflation rate (consumer prices): 3.5% (2001 est.)