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Economy June 17, 2026 09:15 AM

Central Bank of Chile Lowers 2026 Growth Outlook to 1%–1.75%, Lifts 2027 Forecast

Quarterly monetary policy report trims near-term GDP and investment forecasts while raising the outlook for 2027 and nudging 2026 inflation higher

By Derek Hwang
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Chile's central bank adjusted its projections in the quarterly monetary policy report published today, cutting the 2026 GDP growth forecast to a range of 1% to 1.75% from 1.5% to 2.5% and lifting the 2027 forecast to 2% to 3% from 1.5% to 2.5%. The bank also raised its year-end inflation projection for 2026 to 4.2% while keeping inflation forecasts for 2027 and 2028 unchanged. Revisions to domestic demand, investment and private consumption show softer near-term momentum and stronger growth projected for 2027.

Central Bank of Chile Lowers 2026 Growth Outlook to 1%–1.75%, Lifts 2027 Forecast
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Key Points

  • Central bank cut 2026 GDP forecast to 1%–1.75% from 1.5%–2.5% and raised the 2027 forecast to 2%–3% from 1.5%–2.5%. - Impacts macroeconomic outlook and market expectations.
  • Inflation year-end 2026 projection increased to 4.2% from 4%, while 2027 and 2028 forecasts remain at 2.9% and 3% respectively. - Relevant for bond markets and monetary policy considerations.
  • Investment and domestic demand forecasts diverged: 2026 investment trimmed to 2.2% from 4% while 2027 investment raised to 5% from 3.2%; private consumption for 2026 lowered to 1.8% from 2.2%. - Affects sectors tied to capital spending and household demand.

Chile's central bank on Monday revised several elements of its macroeconomic outlook in its quarterly monetary policy report published today, cutting its growth forecast for 2026 and raising the expected expansion for 2027.

Growth projections - The bank now projects GDP growth of between 1% and 1.75% for 2026, down from its previous range of 1.5% to 2.5%. For 2027 the institution upgraded its projection to a range of 2% to 3%, compared with the earlier estimate of 1.5% to 2.5%.

Inflation outlook - The year-end inflation forecast for 2026 was raised to 4.2% from 4%. The central bank left its inflation forecasts for 2027 and 2028 unchanged, at 2.9% and 3% respectively.

External balance - The current account balance as a percentage of GDP is expected to improve in 2026 to -1.4%, versus the prior projection of -1.7%. The projection for 2027 was maintained at -1.9%.

Domestic demand, investment and consumption - Domestic demand growth for 2026 was slightly trimmed to 2.2% from 2.4%, while the bank raised the 2027 domestic demand forecast to 3% from 2.5%. Investment was revised down sharply for 2026 to 2.2% from 4%, but the 2027 investment forecast was moved up to 5% from 3.2%. Private consumption is now expected to grow 1.8% in 2026, down from the previous estimate of 2.2%, and the 2027 consumption forecast was marginally reduced to 2% from 2.1%.

Taken together, the central bank's revisions point to weaker near-term activity in 2026 across GDP, investment and private spending, while signaling stronger momentum in 2027 driven by higher projected investment and overall GDP growth. The bank also signaled a slightly higher inflation path for the end of 2026, with subsequent years' inflation projections left unchanged.

Policy implications and market reactions were not detailed in the report text provided here. The report contains the central bank's internal assessments and updated numerical projections for key aggregates including GDP, inflation, the current account balance, domestic demand, investment and private consumption for the successive years covered.

Risks

  • Weaker near-term growth in 2026 as signaled by lower GDP, investment and consumption forecasts could weigh on sectors dependent on domestic demand, including retail and construction.
  • Higher year-end inflation for 2026 implies upside pressure on price levels that may influence monetary policy decisions and affect fixed-income markets.
  • An improved 2026 current account balance projection to -1.4% from -1.7% still leaves an external deficit, which could pose vulnerabilities if external financing conditions shift.

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