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 4.4% in 2000. Growth fell back to 2.8% in 2001 and 1.8%
in 2002, largely due to lackluster global growth and the devaluation
of the Argentine peso. Unemployment remains stubbornly high, putting
pressure on President LAGOS to improve living standards. One bright
spot was the signing of a free trade agreement with the US, which
will take effect on 1 January 2004.
GDP:
purchasing power parity - $156.1 billion (2002 est.)
GDP - real growth rate:
2.1% (2002 est.)
GDP - per capita:
purchasing power parity - $10,100 (2002 est.)
GDP - composition by sector: agriculture: 11% industry: 34% services: 56% (2001)
Population below poverty line: 21% (1998 est.)
Household income or consumption by percentage share: lowest 10%: 1.3% highest 10%: 45.6% (1998)
Distribution of family income - Gini index:
56.7 (1998)
Inflation rate (consumer prices):
2.5% (2002 est.)
Labor force:
5.9 million (2000 est.)