Chile: Economy slips into contraction in Q3 2025
GDP shrinks sequentially in Q3: Chile’s GDP contracted 0.1% on a seasonally adjusted quarter-on-quarter basis in Q3, following 0.4% growth in the prior quarter. Q3’s reading was the weakest since Q2 2024 and undershot market expectations.
In annual terms, the economy grew 1.6% in Q3, following 3.3% growth in the prior quarter.
Falling mining output outweighs robust domestic demand: Compared to the prior quarter’s data, readings in Q3 softened for private consumption (+0.3% on a seasonally adjusted quarter-on-quarter basis vs +0.9% in Q2), exports of goods and services (-2.5% vs -1.4% in Q2) and imports of goods and services (-0.6% vs +4.6% in Q2). In contrast, readings strengthened for government consumption (+1.4% vs -1.5% in Q2) and fixed investment (+4.6% vs +3.8% in Q2).
Q3’s reading was primarily influenced by a decline in mining output as the world’s largest copper producer was hit by a supply shock in July—the nation suffered its worst mining industry accident in three decades, halting activities at El Teniente for over a week. The mining sector’s downbeat performance outweighed robust domestic demand, which was bolstered by lower interest rates, elevated copper prices and improving private sentiment.
GDP to rebound sequentially in Q4: The economy is set to return to growth in the final quarter of 2025 in sequential terms; GDP growth should then stabilize close to its projected Q4 levels through end-2026. In 2026 as a whole, GDP growth is set to decelerate marginally from this year as government spending and fixed investment growth ease. Moreover, slower export growth will weigh on momentum as trade uncertainty persists. The 14 December presidential face-off between Jeannette Jara and José Antonio Kast is key to track.
Panelist insight: On the outlook, Itaú Unibanco analysts said:
“For 2026, we project growth of 2.2%, with upside risks if investment momentum continues and spreads to other sectors. Elevated terms of trade, lower inflation, and declining interest rates will support non-mining growth.”