No center of Santiago, the epicenter of what is probably the hottest economy in the world, Carol Castillo is faced with many angry people.
Castillo is a dealership salesperson Chevrolet in the city, where the demand of wealthy Chileans for cars is so high that waiting lists stretch for months. Customers aren’t too satisfied with the wait, says Castillo. The situation causes frustration and sometimes tantrums, especially for those looking to buy a Silverado. The current estimated delivery date for a diesel version of the popular pickup: October 2022.
“Everyone wants their car now,” Castillo said. It was a Wednesday morning, usually a quiet time for the dealership. And yet every table in the showroom was filled with potential buyers.
The shortage is not unique to Chile, of course — problems in global supply chains are pushing up car delivery times in many markets — but they are particularly severe in the country. Chileans buy everything: cars, refrigerators and electronics fly off the shelves.
GDP growth, according to Chile’s central bank, is expected to reach 11.5% this year, which would be the fastest pace not only among the largest economies, but also a record in the country. It’s no small feat in a country that had one of the biggest economic booms of modern times in the 1980s and 1990s, after dictator Augusto Pinochet’s “Chicago Boys” led a wave of free-market reforms.
Ironically, one of the growth factors now stems from the partial dismantling of a key economic pillar from that time, allowing for early withdrawals from the private pension funds established under Pinochet. These withdrawals injected $49 billion into the economy. The cash aid distributed by the government in the pandemic also helps, another product of the country’s distancing itself from the stricter versions of Chicago Boys capitalism.
Chile’s coronavirus vaccination rate, close to 75%, is the highest on the American continent, providing another boost to the economy as Covid cases decline.
We saw a strong recovery in confidence from families and companies,” said Andrés Perez, chief economist for Chile and Colombia at Banco Itaú. “It reflects, on the one hand, significant improvements in the health situation, but also an environment with ample stimulus and liquidity.”
Pérez projects Chile’s GDP to grow about 10% this year, after falling 5.8% in 2020. Even with growth slowing next year, the strong job market will support consumer spending, he said.