IMF Cuts Chile Growth Forecast to 0.6% This Year

CHILE · ECONOMY

The International Monetary Fund, the Washington-based global lender, has cut its 2026 growth forecast for Chile to 0.6%. The same outlook sees unemployment climbing to 9.5%, among the weakest readings in South America.

The International Monetary Fund has sharply lowered its growth forecast for Chile this year. Its new World Economic Outlook, released on Tuesday, 13 October, puts 2026 growth at only 0.6%.

For readers in the United States, the downgrade matters for copper supply and for Chilean shares traded in New York. Chile is the world’s largest copper producer and a close US trade partner.

The downgrade lands amid a cooling copper market and softer local investment. It adds to a run of weaker forecasts for one of Latin America’s most open economies.

What the IMF Changed

The Fund now expects the Chilean economy to grow 0.6% in 2026, down from the 2.4% it projected in April. That is a cut of nearly two percentage points in six months.

The forecast for 2027 was left unchanged at 2.6%, according to the IMF tables. In South America, only Bolivia, where the IMF sees a 3% contraction, has a weaker 2026 forecast.

The World Economic Outlook is the IMF’s twice-yearly health check on the global economy. Investors and governments use it to compare countries side by side.

A haul truck inside Codelco’s Chuquicamata open-pit copper mine near Calama in northern Chile, pictured in 2016. File photo. Photo: Diego Delso / Wikimedia Commons (CC BY-SA 4.0)

Jobs and Prices Under Pressure

The IMF sees unemployment rising from 8.5% in 2025 to 9.5% in 2026. That would be close to one worker in ten without a job.

For 2027 the Fund pencils in a further rise to 9.6%, the tables show. Average inflation is seen at 3.7% this year, above the 3% target set by Chile’s central bank.

Higher joblessness tends to slow household spending across the economy. It can also raise pressure on the government to support jobs.

Who Reported the New Figures

El Mostrador and La Tercera, two Chilean outlets, reported the new figures from the IMF tables. Both cited the Fund’s World Economic Outlook published on Tuesday.

The IMF’s own DataMapper database now shows the same October figures for Chile. Earlier on Tuesday it still showed the April baseline of 2.4% growth and 8.1% unemployment.

The IMF expects Latin America and the Caribbean as a whole to grow 2.3% in 2026. By 2027, Chile’s 2.6% forecast would sit just above the regional 2.5%.

What It Means for You

For US investors, slower growth weighs on Chilean shares listed in New York, such as the lithium producer SQM. A weaker economy can also pressure the Chilean peso against the US dollar.

Chile supplies much of the copper used in US manufacturing and electronics. It also feeds the lithium supply chain behind electric-vehicle batteries in the United States.

Chile sits in the US Visa Waiver Program, so travel links are close. Weaker local demand can still affect US firms selling into the Chilean market.

What Is Not Known

The IMF has not yet set out in detail why it cut Chile’s forecast so sharply. Its tables give the new numbers but not the country-specific reasons.

It is not yet clear how fast the Fund expects growth to recover after 2027. Chile’s own quarterly output and jobs data for late 2026 are still to come.

What Comes Next

The IMF will revisit these numbers in its next World Economic Outlook in 2027. Chile’s central bank meets later in October to set interest rates.

A lower forecast is not the same as a recession, which the IMF does not predict. Much will depend on copper prices, investment and global demand in the months ahead.

Frequently Asked Questions

What Did the IMF Say About Chile?

The IMF cut Chile’s 2026 growth forecast to 0.6%, down from 2.4% in April. It also raised its 2026 unemployment forecast to 9.5%.

When Was the Forecast Released?

The figures come from the IMF World Economic Outlook published on Tuesday, 13 October. The IMF updates the outlook twice a year.

Why Does This Matter for the United States?

Chile is a top copper and lithium supplier to US industry and electric-vehicle makers. Slower growth can also weigh on Chilean shares listed in New York.

How Does This Compare With Earlier Forecasts?

In April the IMF expected 2.4% growth and 8.1% unemployment for Chile in 2026. Its new 0.6% forecast is also well below the 2.3% it expects for Latin America and the Caribbean.

Is Chile Heading Into a Recession?

The IMF still projects positive growth of 0.6% for 2026, not a contraction. A recession would mean the economy shrinking, which the outlook does not show.

Sources: IMF World Economic Outlook; IMF DataMapper, Chile; El Mostrador; La Tercera (all accessed 13 October 2026).