In brief
Amid public fatigue with the ruling NM coalition, the opposition CV coalition is the favourite to win the 2017 presidential election, but an independent senator, Alejandro Guillier, is gaining momentum. The current president, Michelle Bachelet, will struggle with low approval ratings, and will modify some reform proposals, including labour-market reform, to facilitate passage. Growth will pick up to 1.3-2.6% per year in 2017-21, stronger than 2016 but tepid relative to the commodity boom years.
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Global bond activity jumps in Q1
Argentina, Brazil and Mexico tapped the markets heavily. Benign financing conditions are likely to persist.
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Presidential hopefuls present platforms
The centre-left has allowed the election narrative to be dictated by its centre-right and left-wing competitors.
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Unpopular tax reforms fund increased social spending
Assuming that the centre-right opposition wins the 2018 elections, tax-raising measures will probably be dialled down.
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Economic growth
| (% unless otherwise indicated) | |||
| 2016 | 2017 | 2018 | |
|---|---|---|---|
| US GDP | 1.6 | 2.2 | 2.1 |
| OECD GDP | 1.7 | 1.9 | 1.7 |
| World GDP | 2.2 | 2.6 | 2.4 |
| World trade | 1.9 | 2.9 | 2.7 |
| Source: The Economist Intelligence Unit | |||
Expenditure on GDP
(% real change)
= 2017
= 2018
Private consumption
Government consumption
Gross fixed investment
Exports of goods & services
Imports of goods & services
Source: The Economist Intelligence Unit
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Origin of GDP
(% real change)
= 2017
= 2018
Agriculture
Industry
Services
Source: The Economist Intelligence Unit