The International Monetary Fund projected economic growth for this year of 2.3% from a previous forecast of 2.5%, while for next year it also made a slight adjustment to 2.3% from 2.4%.
The International Monetary Fund lowered its GDP growth estimate for Chile this year to 2.3% from a previous forecast of 2.5%, while for next year it also made a slight adjustment to 2.3% from 2.4%.
The IMF has also described it as "essential" to boost the economy's dynamism in order to address many of the social and fiscal pressures facing the country, including strengthening inclusion and the challenges posed by population ageing and climate change.
This is one of the main conclusions shared by the Fund's technicians in Article IV, in which they pointed out that Chile's current economic needs are mainly of a structural nature.
Priorities include boosting growth and employment in the medium term, strengthening fiscal, financial sector and international reserve buffers, particularly in the context of a difficult global environment, and continuing to reduce inequality.
The agency believes that the government is making "significant efforts" and its growth strategy contains aspects that will yield significant growth dividends if implemented "quickly and consistently."
However, the Fund has mentioned other pending tasks such as streamlining applications for investment permits and environmental assessments to facilitate investment by making the process faster and more predictable. "These measures are of the highest priority, as they affect all sectors," says Article IV.
The IMF has also advocated facilitating R&D, which is still scarce in Chile, and better disseminating the benefits of technological progress to increase productivity. In this context, the proposed legislation on technology transfer could stimulate research activities by easing restrictions on researchers and allowing them to create or participate in technological companies and claim income from research results (for example, patents).
MACROECONOMIC ENVIRONMENT
While the IMF has argued that the imbalances in the Chilean economy have largely been resolved, it has warned that the recovery has been uneven across sectors, the labor market is lagging and inflationary pressures have not yet fully subsided.
Among other measures in this area, he has called for proceeding with caution when establishing new increases in the minimum wage, given the possible impact on formal employment.
In this regard, he has invited consideration to the possibility of creating a mechanism for setting the minimum wage that would allow future decisions to be isolated from the political cycle and take into account economic events.
