Emerging Markets – Opportunities & Threats: Chile
by Sterling J. Scott, Marketing Communications Coordinator, MHI | @mhi_sterling
Opportunities
Chile is one of the smaller emerging markets in the Americas, with a population of 17.6 million. Chile’s GDP is $277.2 million and has been growing at an annual rate of 4.3% on average since the global financial crisis. GDP per capita has been growing at an even faster rate of 5.3%. Much of this growth is a result of Chile’s world-leading copper exports. The country’s strong mining sector fueled economic development while the tourism, finance, and services sectors also grew. Chile has strong trade relations with the United States, Mexico, Canada, China, Malaysia, Indonesia, and other economic powerhouses which have increased both exports and investments.
Threats
Chile’s economic growth has been decelerating as a result of decreasing demand for copper. The country benefited from high demand in China due to property booms. Chile is trying to accelerate growth and is implementing a stimulus package which features over $500 million in public investments.
Conclusion
The country’s economy is natural resource-based and is highly dependent on copper exports for growth. However, Chile is diversifying its economy and investing in its people, which are recipes for accelerated growth. Chile’s strong bilateral trade relations will continue to help sustain growth. Investors are wary of the slowed growth in Chile; however, investments continue to flow inter the country. Growth is not decelerating at a quick enough pace to cause a panic, but it is a cause for concern.
More information on supply chain trends, recommended strategy, and innovations that drive supply chains are available in the 2014 MHI Annual Industry Report which can be downloaded at www.mhi.org.
