Chile enters the second half of the year with resilience holding, but stress starting to show. The Central Bank has finally shifted, cutting rates for the first time in 2025 as inflation cools and growth steadies. But the policy path remains cautious, the labour market is still dragging and vulnerabilities in infrastructure and cyber resilience continue to simmer just out of frame. Political noise is rising fast ahead of November’s election and the window for steady leadership is getting narrower by the month.
Monetary Policy
The Central Bank cut the benchmark rate by 25bps in July, taking it to 4.75%. This marks the first move of the year after months of holding at 5%. The decision was unanimous and signals growing confidence that inflation is finally nearing target. That said, the tone stayed cautious. No big promises. Markets now expect further cuts by year end, possibly down to 4.50%. As we flagged in our April and May briefs, the Central Bank had held at 5.00% for three straight m...
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