Chile’s economy grew by 2.5% in 2025, exceeding preliminary estimates and marking a positive, though modest, expansion for the South American nation. The growth was largely fueled by robust domestic demand, particularly a surge in investment, according to a recent report from the Central Bank of Chile. This positive momentum comes as President Gabriel Boric nears the end of his term, a period that has seen mixed economic results.
Investment played a key role in the overall economic performance, with a notable 8.9% increase. A significant driver of this growth was the gross fixed capital formation (FBCF), which saw a 7.0% rise – its strongest performance since 2021. This indicates a renewed confidence in the Chilean economy and a willingness among businesses to invest in future growth. The investment boom was particularly strong in the latter half of the year, with a 9.7% increase recorded in both the third and fourth quarters of 2025.
The increased investment was primarily channeled into the purchase of machinery and equipment, including electrical and electronic devices, as well as transportation vehicles like trucks and buses. This suggests businesses are modernizing operations and preparing for increased activity. Investment reached 24.2% of Chile’s GDP in real terms during 2025.
However, the economic expansion wasn’t uniform across all sectors. The mining industry, a cornerstone of the Chilean economy, experienced a significant downturn. The sector contracted by 1.3% overall in 2025, with a sharp 6.2% decline in the fourth quarter. This slowdown was attributed to lower ore grades, water restrictions impacting production, and temporary shutdowns at some mining operations, according to the Central Bank. The accident at El Teniente, a major Codelco copper mine, in July of last year also contributed to the sector’s struggles.
Despite the challenges in mining, the non-mining sector demonstrated growth, expanding by 3%. Increased production of gold, silver, and non-metallic minerals – particularly lithium – contributed to this positive trend. However, iron production saw a decline.
Impact on the Boric Administration
The 2.5% growth in 2025 brings the average economic growth during President Gabriel Boric’s administration to 2%, making it the second-worst economic performance since Chile’s return to democracy in 1990. In 2022, the economy grew by 2.2%, followed by a sluggish 0.5% increase in 2023, marking the lowest growth rate since the pandemic year of 2020. 2024 saw a rebound with 2.6% growth, which was the best year of Boric’s term, before closing out with 2.3% in 2025.
These figures fall significantly below the economic growth rates achieved under previous administrations, including the 7.4% growth seen during Patricio Aylwin’s government, 5.5% under Eduardo Frei, 4.8% during Ricardo Lagos’s tenure, and 3.5% and 5.4% and 2.5% under Michelle Bachelet and Sebastián Piñera respectively.
Looking ahead, the Banco Central de Chile will continue to monitor economic indicators and adjust monetary policy as needed. Further data on the performance of key sectors, including mining and exports, will be released in the coming months. You can find more detailed statistics and reports on the Banco Central de Chile’s website.
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