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Eco 372 Week 2 Pestle Analysis Of Chile

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(ECONOMIC ANALYSIS, 2014)With the largest production of fine copper and good economic governance with it regards has given Chile very strong economic position in the world. (Chile: Country mining guide, 2014) Chile is the highest producer of fine copper in the world and is said to have 100 million tons of fine copper reserves. Its macroeconomic stability has made Chile the fifth largest economy in South America and second largest GDP in the region. (The Heritage Foundation, 2014) Chile has been the leader of the South American region in competitiveness, thus the Global Competitiveness Index 2013-14 have ranked Chile 34th out of the 148 countries. (Chile: Country mining guide, 2014) In terms of labour market efficiency and financial market development, …show more content…

The banking system has been very robust in keeping the external debt low at 8.1%. Moreover, since 2010, the Chilean banks have been diversifying the external funding source which is seen to be positive. Additionally, majority of banks funding comes from deposit which is considered as a safe source of funding as risk is reduced. However, too much dependence on copper export has made Chile vulnerable to the fluctuating market prices. Chile has been a major commodity providing sector and thus the risk of market slow down or recession is more on the economic development. (Wilson, McMahon, & Cervantes, 2013-2013) Despite that, the Fraser Institute’s Survey of Mining Companies 2012-13 ranked Chile 8th on Policy/Mineral potential among 98 jurisdictions. It also ranks 23rd and 11th on policy potential index and mineral potential index respectively. The Fraser survey indicates Chile potential of reform policies with regards to the mining which is by far the key stone of their …show more content…

(INTERNATIONAL MONETARY FUND, 2014) A strong and stable macroeconomic policy has led to a growth rate of 5.2 percent in the period of 2000 to 2010 and is still growing with a rate of 6.2 percent in 2013. Such improvements in macroeconomic performance over the last decade can be seen as a result of the Highly Indebted Poor Countries debt reduction initiative in 2005 and also improved revenue mobilization. Consequently, Zambia in 2011 was included in the lower-middle income country, a status it lost in the 1980’s. Investment in mining sector and the high price of copper in the international market has led to recovery of nation economy. (What would it take for Zambia's copper mining industry to reach its potential, June 2011) For a long period the performance of the Zambia’s economic performance was dependent on the fortune of copper mining industry. The fall in copper price in the 1970s led to the low economic growth and falling per capita GDP and a rise in copper prices led to strong economic growth in the

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