Newsletters — April 15, 2022

Economic outlook of South American target markets and prognosis for 2022 – 2023

ToolBox Consulting Ltd. is planning to organize in 2023 a Roadshow in South America. Especially we are interested in “ABC’s” meaning Argentina, Brazil and Chile. Let’s see economical situation and prognosis for 2022 and 2023.


The economy is projected to expand by 2.5% in 2022 and 2.3% in 2023 against the backdrop of a strong recovery in 2021, declining COVID infections and an acceleration in vaccination rates. Private consumption and investment have been vigorous while high commodity prices have bolstered exports, with the current account now in surplus. Inflation has picked up and will remain high, in part because a large share of the fiscal deficit is monetised. Foreign currency reserves have declined. Unemployment has come down and formal employment has risen, but high labour informality remains a concern while poverty affects more than 40% of the population.


GDP growth is projected to reach 5% in 2021, but to slow down to 1.4% in 2022 and 2.1% in 2023. The vaccination campaign has accelerated and economic activity, underpinned by private consumption and investment, restarted as restrictions were lifted. Exports have benefited from the global recovery, the robust demand for commodities and a weak exchange rate. However, supply bottlenecks, lower purchasing power, higher interest rates and policy uncertainty have slowed the pace of recovery. The labour market is recovering with some delay and unemployment remains above pre-pandemic levels.  


The Chilean economy is growing strongly, fuelled by a rapid vaccine rollout, a large fiscal stimulus, high commodity prices and the short-term impact of extraordinary pension fund withdrawals on consumption. GDP growth is expected to reach 12% in 2021 and slow towards 2% in 2023, as monetary and fiscal policies tighten. Inflation has risen amid buoyant domestic demand and supply bottlenecks, but is projected to slowly return to the target of 3% by early 2023.

Source: OECD Economic Outlook (December 2021).