Chile’s economy is on an upward climb with reports from the Organization for Economic Cooperation and Development (OECD) released Wednesday showing a 3.6 percent increase in the country’s gross domestic product.
Business inside the country has surpassed past projections for 2018, almost doubling in success since the OECD’s last report published in November.
“Historically low” interest rates, which were introduced during the second half of last year; exportation; and the growing rapport between consumer and investor are believed to be behind Chile’s growing success, the OECD said Wednesday.
However, the organization warned that the Sebastian Piñera administration's plans to cut the fiscal deficit may trigger a drop in infrastructure investment and cause long-term damage to both private and public economic sectors. Also, sectors of civil society continue to criticize the lack of investment in social programs, low wages, a crumbling health system and pervasive inequality where most profits and growth goes to an ever smaller section of society.
The OECD also advised the government introduce “reforms to boost investment and productivity… in order to maintain high growth in the medium term." The OECD’s report suggested constructing more nurseries could boost female employment, easing regulation on workers’ contracts would ensure lengthened employment, and “extending unemployment insurance would address and reduce segmentation in the labor market.”
So far, inflation has remained at the expected rate of 2 percent, while wage benefits have seen an increase.
The OECD is composed up of 35 member nations which have supported the international monitor since it’s incarnation in 1960. Last week, Colombia announced its decision to join the ranks as the 36th member with President Manuel Santos signing the final documents in France Wednesday.
OECD Secretary Angel Gurria described the event as an important moment and he was “very proud” to incorporate the South American country in the group’s decisions.
"The signing of the peace agreement that ended more than 50 years of internal conflict was another great moment [for Colombia] and a necessary condition for our development to take off, its energy and all its talent to improve the lives of Colombians," he said.
Before the European Parliament, Santos said the peace is “irreversible” and thanked the European Union for its complete support over the last seven years during this initiation process.