This Friday, the rating agency Moody's affirmed Chile's A2 credit rating with a "stable" outlook. Moody's based its decision on the fact that "Chile's credit profile balances its high institutional and fiscal strength, supported by a long history of prudent macroeconomic and fiscal policies." 

The agency specified that "economic growth has recovered throughout 2024 – with annual real GDP growth of 2.6% for 2024, compared to 0.5% in 2023 – and we forecast real GDP growth of around 2.5% for this year and next, slightly higher than our previous expectation of growth close to 2%". These estimates are in line with what was projected by the Ministry of Finance. 

"It is good news that ratifies the solidity of the Chilean economy and its ability to withstand external shocks such as those that unfortunately are being anticipated today," Minister of Finance Mario Marcel said from Washington, United States, where he is attending the Spring Meetings of the IMF and the World Bank. 

The agency also refers to the situation of tariffs imposed by the United States - which in the case of Chile are 10% - commenting that "it is negative, but it should be manageable for Chile. The country's exports to the United States account for less than 17% of total exports of goods. However, Chile would be more affected by a slowdown in China, given its close trade ties." 

In view of this, the Minister of Finance said: "This situation should encourage us to persist in several of the purposes we have set, particularly with regard to fiscal consolidation and at the same time use this opportunity to take full advantage of our numerous trade agreements with the rest of the world, to also diversify our trade and be more resilient in the face of the evolution of the main economies: United States and China." 

In the baseline scenario, Moody's forecasts "that Chile's long-standing political consensus on fiscal responsibility will be maintained, preserving the country's overall fiscal soundness during future political and economic cycles." It added that the country's fiscal strength "reflects a relatively low, albeit growing, debt burden, offset by a favorable debt structure and the presence of fiscal buffers."

Finally, the agency concluded that "the stable outlook reflects our view that Chile's credit profile will remain aligned with that of A2-rated countries. The risk of a significant and long-lasting shock, negative or positive, affecting the country's economic and fiscal soundness is balanced. We anticipate that the government's efforts to promote greater investment and productivity in the mining and non-mining sectors will contribute to consolidating long-term growth. In addition, despite the likely increase in annual social spending driven by increased social demands for greater government support, we expect Chile to remain prudent in its fiscal policy."