Andrés Velasco, Finance Minister:"Chile is prepared for global financial crisis"Published: January 5, 2009
The Chilean Economy is able to withstand the global crisis, according to Finance Minister, Andrés Velasco. While several countries expect to deal with recession, Chile's Central Bank has announced an expected 2% to 3% growth in its gross domestic product for 2009. As illustrated in the graph (below), Chile's stock market is the most resilient in the region, and continues to withstand the effects of the financial crisis.
"In Chile, we're still talking about how much the economy will grow, while in other countries, the discussion has now become how much the economy will contract," Velasco told reporters on December 29th, 2008. The Minister pointed out that the country has US$21.5 billion in sovereign wealth funds and a record level of investment during 2008, while inflation is slowing.
Chile's sound business environment is the result of a policy-driven strategy focused on building sound macroeconomic fundamentals and strong institutions. Chile has a solid, appropriately regulated and supervised financial system, and a responsible, stable fiscal policy. Monetary policy is conducted by an independent Central Bank, which uses an inflation targeting regime supported by a floating exchange rate.
The country has earned the trust of many international institutions. In its 2008 ranking (published Dec 17th), the agency Standard & Poor's confirmed its sovereign credit rating for Chile as "A+" for foreign currency and "AA" for local currency. Also, Chile's outlook remained "stable" according to S&P, thus confirming last year's notes on sovereign debt.
The agency also pointed out "the low public sector and external debts, a comprehensive fiscal flexibility, and an increasingly prosperous economy", giving Chile the highest position in Latin America.
Meanwhile, Chile climbed from 11 to 8 in the Index of Economic Freedom 2008, published by the Heritage Foundation. "Its overall score is 0.8 percentage point higher than last year, mainly reflecting an improved investment climate", remarks the Heritage Foundation.
In this aspect, the Chilean Economic Development Agency (CORFO) has several subsidies and grants for promoting investment opportunities in local emerging sectors.
Source: Invertia