Price bull commentary steals the limelight from real growth challenges and responses

By Jesse Morton, Technical Writer

Observers have described Chile as the Saudi Arabia of copper. And like Saudi oil, Chilean copper is at something of an inflection point. There are indicators suggesting growth on the horizon. There are indicators suggesting otherwise. Ultimately, unlike Saudi Arabia, where oil production has obviously peaked, it appears Chile still has much to say about which prevails.

The national economic backdrop is sustained, albeit slow, growth. The country’s central bank reported economic activity rose 1.6% in 2017. It announced it anticipates an uptick in investment following the election of Sebastian Piñera, who will take office in March. Piñera, in his second stint as president, is expected to deliver on promises to cut the corporate tax rate and roll back his socialist predecessor’s tax, labor and education reforms. Among his promises is the target of a 7% increase in investment, presumably by private sector players.

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