ecause of tight monetary policies
implemented to keep the current account deficit in check and because
of lower export earnings - the latter a product of the global
financial crisis. A severe drought exacerbated the recession in
1999, reducing crop yields and causing hydroelectric shortfalls and
electricity rationing, and Chile experienced negative economic
growth for the first time in more than 15 years. Despite the effects
of the recession, Chile maintained its reputation for strong
financial institutions and sound policy that have given it the
strongest sovereign bond rating in South America. By the end of
1999, exports and economic activity had begun to recover, and growth
rebounded to 4.2% in 2000. Growth fell back to 3.1% in 2001 and 2.1%
in 2002, largely due to lackluster global growth and the devaluation
of the Argentine peso. Chile's economy began a slow recovery in
2003, growing 3.2% and accelerated to 5.8% in 2004. GDP growth
benefited from high copper prices, solid export earnings
(particularly forestry, fishing, and mining), and stepped-up foreign
direct investment. Unemployment, however, remains stubbornly high.
Chile deepened its longstanding commitment to trade liberalization
with the signing of a free trade agreement with the US, which took
effect on 1 January 2004.

GDP (purchasing power parity):
$169.1 billion (2004 est.)

GDP - real growth rate:
5.8% (2004 est.)

GDP - per capita:
purchasing power parity - $10,700 (2004 est.)

GDP - composition by sector:
agriculture: 6.3%
industry: 38.2%
services: 55.5% (2004 est.)

Labor force:
6.2 million (2004 est.)

Labor force - by occupation:
agriculture 13.6%, industry 23.4%, services 63% (2003)

Unemployment rate:
8.5% (2004 est.)

Population below poverty line:
20.6% (2000)

Household income or consumption by percentage share:
lowest 10%: 1.2%
highest 10%: 47% (2000)

Distribution of family income - Gini index:
57.1 (2000)

Inflation rate (consumer prices):
2.4% (2004 est.)

Investment (gross fixed):
23.9% of GDP (2004 est.)

Budget:
revenues: $21.53 billion
expenditures: $19.95 billion, including capital expenditures of
$3.33 billion (2004 est.)

Public debt:
12.8% of GDP (2004 est.)

Agriculture - products:
grapes, apples, pears, onions, wheat, corn, oats, peaches, garlic,
asparagus, beans, beef, poultry, wool; fish; timber

Industries: