Chile Economy

Topics: Chile, Inflation, Demographics of Chile Pages: 53 (17220 words) Published: January 12, 2013
Analysis of Macroeconomics in Chile
Suggestion on Investment

Date: 12.01.2011

Table of Contents
Executive summary4
Chile background5
About Chile6
Location and Size6

Weather and Climate7
Chile – a seismic country8
The Earthquake in 20109
Overview of Chile Economics9
Chile Economic Structure: The Road Ahead11
Chile GDP Forecast12
Poverty and Wealth12
Chile Unemployment Forecast13
Chile working conditions14
Inflation rate14
Chile Inflation Rate Forecast15
Chile Current Account Balance15
Chile Current Account Balance Forecast15
Currency and exchange rates16
Products. Import and Export18
International Trade19
Chile Industry Sectors21
Doing business in Chile22
Sustained progress22
10 reasons to do business in Chile23
1. Stable economy23
2. World class connectivity24
3. Skilled Human Resources24
4. Competitive business costs25
5. Exceptional quality of life25
6. Access to world markets25
7. Government support25
8. Low corporate tax26
9. Freedom of growth27
10. Solid institutions27
Chile, an open economy27
Labor laws in Chile28
Chile Infrastructure, power, and communications29
The Travel & Tourism Industry in Chile35
Active tourism36
Chile’s competitiveness in tourism37
Starwood Hotels and Resorts. Company overview42
Environmental Matters45
Starwood’s Expansion in Chile46
P.E.S.T.L.E Analysis48
Foreign direct investment in Chile56
SWOT analysis58
15 year Chile macroeconomic forecast59

Executive summary

The objective of this project is to analyze and evaluate the current macroeconomics environment of Chile and formulate a recommendation whether to invest or not in the development of a major hotel chain in the assigned country. We used research as the main method of analysis. The research draws attention to the fact that Chile is a fast developing country with a good and stable economy and a potential to become one of the leaders in the tourism market in the nearest years. Chile is a South American country, which occupies a coastal strip between the Andes Mountains and the Pacific Ocean. Chile has an area of 756,950 square kilometers and a total coastline of 6,435 square kilometers. It borders with Peru, Bolivia and Argentina. The country enjoys a varied climate, ranging from the dry Atacama Desert to Mediterranean climate. The population was estimated at 15,153,797 in 2000 census with an annual growth rate of 1.7% => around 17 million in 2010. Chile has a market-oriented economy characterized by a high level of foreign trade. Exports account for 40% of GDP, with commodities making up some three-quarters of total exports. Chile claims to have more trade agreements, both bilateral and regional, than any other country. Over the past 5 years, foreign direct investment inflows have quadrupled to some US$17 billion. In 2009, the inflation rate was 1.7%, which was a great improvement after 2008, when it averaged 8.7%. What concerns Chile as a country to invest in, it is recognized as one of the most dynamic, stable and open economies in the world. Foreign investment is a cornerstone of its development. The Chilean economy has been classified as one of the economies that have most successfully withstood the world financial crisis unleashed in 2008. The Economist also classified Chile between the 20 best prepared nations for doing business, chosen from the world’s 82 largest economies. Investing in tourism in Chile is profitable as it benefits from accessibility, modern airport, road and transport infrastructure, tourist, airport and flight safety. In 2008, tourism accounted for 3.11% of Chile’s GDP. The country is attractive for tourists due to rich...
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