1Q26_ Quarterly Outlook Report_Final_EN - Flipbook - Page 103
T H E P LUMB LI N E | A RETU RN TO F I RS T PRI N CI PL ES
CHILE
Anibal Alarcon
Senior Economist,
Chile
Juan Manuel Herrera
Betancourt
Senior Economist, Investment
Strategy
Latest
2025f
2026f
2027f
GDP Growth
1.6%
2.5%
2.5%
2.5%
Inflation
3.4%
4.2%
3.0%
3.0%
Unemployment
8.4%
8.4%
7.9%
7.5%
Budget Bal.
-2.9%
-2.1%
-1.7%
-1.5%
Latest
2025
1-yr fwd
2-yr fwd
2-yr yield
4.4%
4.4%
4.7%
4.9%
10-yr yield
5.4%
5.4%
5.3%
5.5%
Yield curve slope
1.0%
1.0%
0.7%
0.5%
Source: Bloomberg Finance LP, Scotiabank Economics, Scotia Wealth Management. "Latest" values are as at December 31, 2025 and, for data other than bond
yields, pertain to the most recent monthly, quarterly, or annual reading available on this date. GDP, inflation, and unemployment forecasts are based on Scotiabank
Economics forecasts dated December 11, 2025. Budget balance forecast is based on median consensus estimate compiled by Bloomberg | 2025 inflation and
unemployment are based on the average YoY rates for each month of the year. | 2025 yields are as at December 31, 2025. Forward periods are relative to December
31, 2025 and are based on forward market pricing.
Key takeaways
•
Private sector optimism about a conservative presidency under Kast will be put to the
test once he takes office on March 11, as he inherits an economy in relatively good shape
expanding at a healthy around-potential pace.
•
We expect investment to be a key growth engine for Chile in 2026, with large
infrastructure projects in mining, public infrastructure, and energy leading the charge,
while our attention shifts to emerging plans in sectors potentially more responsive to
political cycles, as well as to firms’ hiring intentions that may benefit from more
conservative policies on wage and benefit increases under Kast
•
On the monetary policy front, the range for BCCh’s policy path is relatively narrow, so
whichever path it ultimately takes in the next few months is unlikely to make a big
difference for Chile’s markets or economy. The near-term trajectory may see one or no
more rate cuts.
102
