Chile's economy posted slower full-year growth in 2025, expanding 2.5% according to central bank figures released on Wednesday, down from a revised 2.8% in 2024. The Finance Ministry said the outcome "still falls short of Chilean families’ expectations."
Although the annual pace moderated, activity picked up at the end of the year. Gross domestic product rose 0.6% quarter-on-quarter in the fourth quarter after a revised 0.3% contraction in the third quarter, the central bank data showed. That quarterly rebound was stronger than the 0.3% quarter-on-quarter increase forecast by economists in a Reuters poll.
Measured year-on-year, GDP grew 1.6% in the fourth quarter, slightly below economists' projection of a 1.7% increase. Mining output in the quarter rose 0.4%, the central bank reported, supporting the late-year recovery.
Domestic demand was a key underpinning of growth in 2025, and the outturn beat the central bank's own full-year forecast of 2.4% for 2025. Still, the incoming administration of President Jose Antonio Kast is moving quickly to reshape public finances. President Kast, who took office last week, has pledged to tackle what he describes as fiscal mismanagement left by his predecessor. Deputy Finance Minister Juan Pablo Rodriguez said the president aims to leave office with economic growth around 4%, even as the government plans sharp reductions in public spending.
The government's program to repair public finances will include spending cuts of nearly $4 billion, Rodriguez said, with initial measures expected to be implemented this month.
Analysts warned of headwinds. Kimberley Sperrfechter of Capital Economics said the recent spike in energy prices combined with the planned fiscal tightening under President Kast "will cause the economy to weaken in the coming quarters." The government’s latest estimates anticipate 2.4% growth for 2026.
Overall, Chile concluded 2025 with a modest rebound in the final quarter but a lower full-year expansion than in 2024. The interplay between near-term domestic demand, mining sector performance, higher energy costs and an aggressive public spending consolidation program will shape growth prospects as the new administration implements its agenda.