For the second year running Chile becomes the OECD member with the highest GDP expansion which this year will reach 5.2% compared to the 1.4% average. November’s estimate in 0.8 percentage points higher than last May’s forecast.
Likewise the Chilean economy will outperform in 2013, (4.6%) and in 2014 (5.4%) its peers from the “developed countries club” although the slower pace next year is attributed mainly to lesser exports to the Euro zone.
What will the economies of major nations be like in 2042? If current growth rates continue the GDP per capita will resemble the chart below.
|Country||Growth rate %||Debt % of GDP||GDP 2012||GDP 2042|
Australia is a standout, passing by a wide margin Britain, Canada, Germany and the USA. Clearly, it’s better to be in Asia than Europe. Chile is a standout, too, rising from the bottom to pass Portugal, Italy, Spain, Britain and Germany. Of course, most countries don’t sustain high growth for 30 years; Australia and Chile will probably become overconfident, expand the welfare state, and wreck the economy like Europe, Canada, and the USA. Democracies have a way of slowly disintegrating as soon as voters figure out that becoming wealthy is easier by voting and redistributing than by working and investing.
The outlook seems good for Chile in the next few years; the government anticipates
catching up to Portugal by 2017. Given the dire situation in Portugal, I think Chile will surpass it sooner. The Supreme Court of Portugal recently ruled that it is unconstitutional for the government to cut the budget!
Chilean real estate is skyrocketing so the government has convened a group to warn them when it becomes an unsustainable bubble:
Due to concerns regarding an increase of residential real estate prices, the Chilean Financial Stability Council (Consejo de Estabilidad Financiero) has announced the creation of a new group to monitor residential real estate sector risk. The group, comprised of representatives of the Ministry of Finance, the Central Bank and Superintendents of Pensions, Securities and Insurance and Banks, will seek to identify and monitor systemic threats to local financial stability.