2022 Index of Economic Freedom

Chile

OVERALL SCORE74.4
WORLD RANK20
Rule of Law

Property Rights73.0

Judicial Effectiveness91.4

Government Integrity71.4

Government Size

Tax Burden72.4

Government Spending78.1

Fiscal Health75.3

Regulatory Efficiency

Business Freedom76.2

Labor Freedom58.0

Monetary Freedom79.4

Open Markets

Trade Freedom78.0

Investment Freedom70.0

Financial Freedom70.0

Create a Comparison Chart

See how Chile compares to another country using any of the measures in the Index.

vs
Close
Download PDF
Quick Facts
  • Population:
    • 19.1 million
  • GDP (PPP):
    • $454.7 billion
    • -5.8% growth
    • 0.4% 5-year compound annual growth
    • $23,366 per capita
  • Unemployment:
    • 11.5%
  • Inflation (CPI):
    • 3.0%
  • FDI Inflow:
    • $8.4 billion

Chile’s economic freedom score is 74.4, making its economy the 20th freest in the 2022 Index. Chile is ranked 2nd among 32 countries in the Americas region, and its overall score is above the regional and world averages.

Chile’s economic growth turned substantially negative in 2020 but recovered in 2021. Its five-year compound annual growth rate was only 0.4 percent. A five-year trend of gradually declining economic freedom has continued. With scores depressed by losses in fiscal health and trade freedom, Chile has recorded a 2.1-point overall loss of economic freedom since 2017 and has fallen into the lower half of the “Mostly Free” category. Rule of law remains strong, but labor freedom exhibits weakness.

IMPACT OF COVID-19: As of December 1, 2021, 38,356 deaths had been attributed to the pandemic in Chile, and the government’s response to the crisis ranked 121st among the countries included in this Index in terms of its stringency. The economy contracted by 5.8 percent in 2020.

Close

Background

Chile is the world’s leading producer of copper, and growth in GDP is driven by exports of minerals, wood, fruit, seafood, and wine. A polarizing presidential election and the outcome of a contentious rewrite of the constitution of 1981 will shape Chilean politics in 2022 and beyond. The Constitutional Convention elected in May 2021 is dominated by the Left. Former center-right President Sebastian Piñera faced stiff resistance from left-leaning parties in Congress and violent protests that impeded his reform agenda. One of the protest leaders, 35-year-old leftist Gabriel Boric, was elected to succeed Piñera in December 2021. The challenge for the new government will be to protect the country’s orthodox economic model while accommodating calls for expanded social welfare spending.

Rule of Law

Property Rights 73.0 Create a Graph using this measurement

Judicial Effectiveness 91.4 Create a Graph using this measurement

Government Integrity 71.4 Create a Graph using this measurement

Chile has a sound legal framework, and private property rights are generally respected. Secured interests in real property are recognized and generally enforced, and expropriation is rare. The judiciary is independent, and the courts are largely competent in their enforcement of property and contractual rights and free from political interference. Chile was ranked Latin America’s second least corrupt country in Transparency International’s 2020 Corruption Perceptions Index.

Government Size

The top individual income tax rate is 40 percent, and the top corporate tax rate is 27 percent. The overall tax burden equals 20.7 percent of total domestic income. Government spending has amounted to 27.0 percent of total output (GDP) over the past three years, and budget deficits have averaged 3.8 percent of GDP. Public debt is equivalent to 32.5 percent of GDP.

Regulatory Efficiency

Environmental regulations have become extensive and unpredictable. In June 2019, the Ministry of Economy launched the Unified System for Permits (SUPER), an online single-window platform for 182 license and permit procedures that is intended to make it easier to obtain permits for investment projects. Labor laws are somewhat rigid but enforced evenly. The government increased numerous subsidies in 2021, especially for green energy projects.

Open Markets

Chile has 30 preferential trade agreements in force. The trade-weighted average tariff rate is 6.0 percent, and 107 nontariff measures are in effect. Market openness to investment and a relatively efficient regulatory framework have provided a basis for economic dynamism over past decades. The competitive financial system facilitates high levels of bank usage and efficient access to financing.

Country's Score Over Time

View Chart of Scores over Time

Regional Ranking

RANK COUNTRY OVERALL CHANGE
1Canada76.6-1.3
2Chile74.4-0.8
3United States72.1-2.7
4Barbados71.36.3
5Uruguay700.7
6The Bahamas68.74.1
7Jamaica67.4-1.6
8Peru66.5-1.2
9Saint Vincent and the Grenadines65.7-0.6
10Costa Rica65.41.2
11Panama65.4-0.8
12Colombia65.1-3.0
13Saint Lucia64.3-3.2
14Mexico63.7-1.8
15Guatemala63.2-0.8
16Dominican Republic630.9
17Paraguay62.90.3
18El Salvador59.6-1.4
19Guyana59.52.1
20Honduras59.5-0.3
21Trinidad and Tobago58.8-0.2
22Belize56.6-0.9
23Nicaragua54.8-1.5
24Dominica54.41.4
25Ecuador54.31.9
26Brazil53.3-0.1
27Argentina50.1-2.6
28Haiti50-0.8
29Suriname48.11.7
30Bolivia430.3
31Cuba29.51.4
32Venezuela24.80.1
See Entire Region List ›

View all countries ›

Back to Top