Chile’s economy contracts in the first quarter, according to the Banco Central de Chile, even as investors show optimism about President Jose Antonio Kast and his market-friendly policy proposals. The central bank reports that GDP declines in Q1 2026, marking the second consecutive quarterly contraction. The contraction represents the weakest start to the year since 2023, suggesting a difficult near-term outlook for economic momentum.
The decline is attributed to weaker activity in key components, with investment and exports retreating during the quarter. While some market participants had expected Kast’s agenda to support growth, the latest data indicate that the economy is still shrinking at the start of the year. The reports do not provide further detail in the provided excerpts on whether domestic consumption, government spending, or employment are the primary drivers beyond the broad contribution from investment and exports.
Overall, the coverage aligns on the same core point: Chile’s economy records another quarterly contraction in Q1, complicating the policy expectations surrounding the new administration’s growth plan.
