This article on Chile and the persistence of its recent mining productivity issues was originally published in Latin American Consensus Forecasts: August 2026
Chile – Mining Productivity Issues Persist
Consensus Economics, London
The y-o-y rate of the CPI slowed from 4.3% in June, to 3.5% in July, as transport prices eased to 4.6%, from 8.6% in June. This was despite restaurants & accommodation, and health costs, rising by 6.6% and 5.1%, respectively. However, Middle East tensions remain in play and have been a major driver of inflation pressures since March, when fuel costs surged. Energy prices could remain elevated for an extended period of time. Services inflation has also been a concern. As a result, the central bank decided to maintain its cautious approach, holding its policy rate at 4.5% on July 28.
According to the IMACEC indicator (a proxy for GDP growth), activity advanced for the first time in 2026 in non-seasonally-adjusted terms by 2.4% (y-o-y) in June. Growth was supported by a brief rebound in mining after months of pronounced weakness, as well as positive outturns in commerce and other services. However, the bounce-back in the mining sector could have been amplified by base-year effects and an extra working day. Moreover, Q2 GDP as a whole disappointed, shrinking-0.2% (y-o-y) on the back of four quarters of contraction in construction activity and weak consumption. Low copper production generally has dragged on growth this year, even as production rose 1.27mn tonnes in Q2 a 3.6% increase from Q1. Production is still down -7.7% (y-o-y). In an unprecedented move to boost copper output, the government is permitting state-owned copper producer Codelco to retain its 2025 profits of US$2.42bn, in order to reduce its corporate debt burden whilst also allowing it to redevelop aging infrastructure. Increased investment could also be supported by President Kast’s Reconstruction bill, passed by Congress on August 5, which promises corporate tax cuts to be gradually implemented, as well as job-hiring incentives in order to combat high unemployment of 9.4%
