Chile and Colombia, a strategic business relationship amid regional economic reconfiguration
Chile projects economic growth between 2% and 3% for 2026, according to its central bank. Photo: iStock
TL;DR
- Chile and Colombia are strengthening their deep economic and business relationship, viewing each other as strategic partners.
- Chile's economy is projected to grow between 2% and 3%, with inflation converging to its target, supported by copper prices.
- Key challenges for Chile include structural weaknesses in institutional capacity, tax competitiveness, and labor market rigidity, which deter investment.
- Both countries are exploring opportunities in sectors such as energy transition, logistics, infrastructure, services, and the digital economy.
- Regulatory complexity, processing times, and security issues are identified as bottlenecks hindering investment and project development.
- Chile faces a competitive disadvantage in tax rates compared to OECD averages, necessitating a well-designed tax reform.
- Labor reforms in both countries need to balance worker protection with flexibility to accommodate company and individual adaptations to technological and demographic changes.
- Cooperation opportunities exist in areas like supplier development, technological innovation in mining and clean energy, and best practice transfer in environmental management.
- The Pacific Alliance is seen as a platform for integration offering clear rules and predictability, though it requires a more pragmatic, results-oriented approach.
- Recommendations for businesses include prioritizing growth and investment, addressing tax competitiveness and regulatory certainty, and enhancing productivity and infrastructure.