When you look at Latin America it is the likes of Brazil, Mexico, Colombia, etc who grab the headlines with other countries such as Chile often left in the shadows. However, while economic growth in Brazil and Mexico continue to push forward at a slower rate it was interesting to see that earlier this week it was announced that economic growth in Chile was actually well above expectations.
This perfectly illustrates the reason why so many expats are now considering Chile as their home of the future. It is a country which has been in the doldrums for some time, it is a country rich in natural resources and finally, it is one which is beginning to fulfill its potential.
Economic growth in Chile
Economic growth in Chile was reported at 6.7% for January 2013 compared to the same period in 2012. This is a very impressive result and continues the 19-month long trend of economic growth in excess of 6%. This is the kind of figure which European counterparts can only dream of and even the likes of Brazil and Mexico are nowhere near this kind of growth.
While it is illegal that growth for the full year will match the 6.7% rise in January 2013, it is still expected to exceed 5.4% with potential for further upward revision. Even this figure of 5.4% is well in advance of the International Monetary Fund’s prediction of 4.4% annual growth in 2013. If anything, the Chilean central bank is erring on the side of caution because there seems to be a great momentum behind the upward curve in Economic growth across the country.
What is behind the increase in economic activity?
While there is no doubt that retail sales, up 9.5%, and mining production, up 8.4%, during the last 12 months have had a major impact on the overall growth figure, there is more to this than meets the eye. There is now a general feel-good factor through which Chile is likely to lead to more confidence from internal and international investors going forward. The fact that the country is finally beginning to fulfill potential income streams from its array of natural resources is a bonus which looking back has been replicated across many successful economies – most notably Australia in recent times.
Taking a step back from the situation, the Chilean government will need to ensure a balance between economic growth and sensible management of the economy. It would not take much to tip the economy one way or the other and overheating of the Chilean economy would be very difficult to cool down.
Benefiting from Latin America
Even though the likes of Brazil and Mexico continue to grab the lion share of both internal and external trade among Latin American countries, Chile is beginning to benefit from ongoing trading arrangements. Many of the Latin American governments have come together to speak as one voice on the international trading stage to gain more access and more business for the continent as a whole. While the vast majority of the new business is going the way of Brazil, Mexico, Colombia, etc there will be opportunities for the likes of Chile to build on recent economic growth and push ahead for the future.
As the expat community continues to flock to Latin America it will come as no surprise that more and more people are now looking at moving to Chile. Historically Chile is a country which has never really featured on the expat community map but it is one which is grabbing the headlines both with regards to economic performance and proactive government policies going forward.
It will be interesting to see when the ever-growing flow of expats to Latin America begins to slow and indeed wherever those who’ve moved there to the side to stay long-term or perhaps repatriate to Europe once the economic environment is calmer. Either way the last few years have been something of a rollercoaster ride for Latin American countries have been on the brink of disaster back in the 1990s and now perhaps stronger than they have been in living memory.