Chile’s Finance Minister Signals Hard Economic Adjustments Are Nearly Done

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Chile’s finance minister said the job of stabilizing the nation’s economy following a period of high inflation and overheated expansion is nearly complete as consumer price pressures wane.

The annual inflation rate is about third of what it was a year ago and will continue declining to 4% in December, Mario Marcel said Wednesday in a Bloomberg Television interview from London, where he is meeting executives as part of the Chile Day investors event. That rate would be just above the central bank’s 3% target.

The Cambridge University-trained minister is now trying to guide Chile out of an economic slowdown that was engineered to rein in torrid demand and smother the fastest inflation since 1992. Its gross domestic product is expected to shrink this year, according to a Bloomberg survey, marking one of the worst performances in Latin America.

The nation’s economy surged by a record 11.7% in 2021 as billions of dollars in early pension withdrawals and public transfers during the pandemic set off a consumption frenzy. By contrast, the government is now placing bets on renewable energy, green hydrogen and a public-private lithium model aimed at developing one of the world’s largest reserves of the metal used in batteries.

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