Chile's economy breaks five-month slide with surprise 2.4% rebound.

June's Imacec broke a five-month losing streak this week with a 2.4% year-on-year gain, a figure that beat market estimates —which had penciled in a rise of around 2%— and marks the best performance of Chilean economic activity since September 2025. The reading, published by the Banco Central, not only erases the worst start to a year since the pandemic, but arrives at a moment when external and internal forces of opposing signs are converging, turning the rebound into something more than a reassuring statistic: it is the first empirical confirmation that the "inflection point" flagged by Finance Minister Jorge Quiroz has real foundations.

The print moved markets immediately. The dollar opened lower against the peso, additionally pressured by two heavyweight external factors: the Bank of Japan's intervention to defend the yen and, more relevant for a commodity-exporting economy, a 5.6% drop in Brent crude to $83 per barrel. The oil slide responded to diplomatic signals from the Middle East —Iran reported progress in talks with Oman to reopen the Strait of Hormuz, while the Trump administration suspended threats of a strike— which, if consolidated, would reduce the geopolitical risk premium that had been propping up energy prices. For Chile, whose industrial and transport cost structure is sensitive to oil, cheaper crude acts as an additional implicit stimulus to activity.

The Imacec's improvement is pushing a growing number of economists to revise their 2026 growth forecasts upward toward 3%, a psychological threshold the market had considered optimistic just months ago. The normalization of mining and fishing activity, along with a favorable base of comparison given the weak performance in the first half of this year, encourages those calculations. Investment is also emerging as a dynamizing factor, a notable turn in a cycle that has been dominated by private spending contraction.

That investment recovery has a very concrete sectoral face. According to Colliers data, demand for corporate office space in Santiago from mining companies and related suppliers grew 200% over the past year, driven by a strengthening pipeline of projects tied to copper and lithium. The phenomenon isn't cosmetic: it reflects the arrival of foreign capital with long-term horizons. Alexandre Saigh, co-founder and CEO of Patria Investments —the Brazilian manager overseeing $60 billion in assets— stated that Chile "was already a good place to invest" and that the government's new regulatory framework makes it "even better," identifying concrete opportunities in electrification, data centers, concessioned highways, and desalination. The statement is politically relevant at a moment when Lorena Herrera, the newly appointed director of Concessions, made her first public interview debut signaling that her priority is providing "greater certainty" to financiers and shareholders over a portfolio of nearly $15 billion in projects.

The investment climate coexists, however, with unresolved tensions on the external front. A Cadem poll revealed that 87% of Chileans reject the tariff hike imposed by Washington, and 57% disapprove of the government's handling of the relationship with the United States. The wine industry, one of the hardest hit since the Liberation Day of April 2, reported a 33% drop in sales to the U.S. market by value during the first half, against a decline of only 8% in the rest of its export markets. The industry association Vinos de Chile is banking on ongoing negotiations to exclude wine from the 12.5% tariffs, but so far products like salmon, fresh grapes, cherries, and blueberries remain subject to duties. That 52% of those surveyed prefer to deepen trade ties with China over any other partner speaks to the strategic reordering that Trump's tariff policy is accelerating in Chilean public perception.

On the fiscal front, the government is moving toward the enactment of its mega-reform for reconstruction and reactivation. Of the bill's 63 articles, the core has already been approved —including the cut in the corporate tax rate from 27% to 23%, tax reintegration, and the elimination of the capital gains tax— with only minor vetoes and the Constitutional Court's preventive review of eight challenged articles still pending. In parallel, August marks the entry into force of the second tier of the additional employer contribution established by the pension reform, which climbs to 2% of taxable wages. The timeline for both reforms overlaps with key weeks for drafting the 2027 Budget, in a context in which Dipres has just changed leadership.

The financial system, for its part, is showing signs of prudence in the face of a still uncertain environment. Banco de Chile set aside 50 billion pesos in additional provisions during the first half, citing tensions in the Middle East as a source of risk in its quarterly report. That a bank with solid fundamentals adopts such a cautious posture illustrates that the optimism generated by the Imacec has not erased the perception of global vulnerability from the map.

What warrants close monitoring in the coming days is multi-faceted. The Senate must vote on the Joint Committee report regarding the property tax exemption for those over 65 and the municipal compensation mechanism, a dispute that pits more than 160 mayors backing the government's proposal against another bloc demanding transparency on the amounts by district. In parallel, the nomination of Cecilia Cifuentes to the Autonomous Fiscal Council —which would replace Hermann González, whose term ends on August 9— requires 34 votes in the Senate, eight more than the ruling coalition controls, turning the negotiation into a thermometer of the Kast government's ability to build cross-cutting majorities. And at Codelco, where new CEO Jorge Gómez is entering a phase of strategic definitions, the debate over a potential privatization —fiercely rejected by the left but pushed by the Partido Republicano— threatens to become the next political-economic battleground of the quarter.

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**Banco de Chile (NYSE: BCH)** — The bank set aside $50 billion pesos in additional provisions during the first half of 2026, citing tensions in the Middle East as the main risk factor in its quarterly report. Its shares are among the four highest dividend yielders on the IPSA, with an estimated yield of between 5.1% and 5.8% according to BICE Inversiones.

**LATAM Airlines (NYSE: LTM)** — The Chilean carrier set up an investment vehicle in May geared toward technology projects and startups, confirming a bet on diversification beyond its core air transport business amid tariff pressure on exports.