In its first-half report, the multilateral institution had previously estimated national economic growth of 2.4 percent for this year and 2.3 percent for 2027.

  However, economic activity has weakened and domestic demand has slowed in recent months amidst a deteriorating labor market and falling confidence, the document explains, highlighting—among other factors—the impact of rising fuel prices on households.

  Nevertheless, the Bank raised its growth forecast for next year, estimating GDP to reach 3.0 percent.

  The Chilean government through the Ministry of Finance presented its Public Finance Report, which also drastically cut the estimate for this year while forecasting an acceleration for the next.

  The government projects GDP growth within a range of 0.25 to 0.75 percent, significantly lower than the previously forecast 1.8 percent.

  For 2027, the government expects a rebound in GDP growth to 3.3 percent, provided it succeeds in revitalizing investment in currently sluggish sectors such as mining and energy.

  The slowdown in 2026 is unwelcome news for the administration of President Jose Antonio Kast, which had set a goal of creating approximately 100,000 new jobs between the remainder of this year and the early months of next year.

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