Banco de Chile’s chief economist Rodrigo Aravena sees more growth for the country and the region, although economic risks remain.

Global Finance: What is your view on the main economic trends at international level for this year and next?

Rodrigo Aravena: The global economy has brought good news on different fronts. Following sluggish economic growth and several sources of political uncertainty (e.g., the US and French elections and the Brexit referendum in the United Kingdom) in 2016, this year has been marked by a strong trend of global recovery, where large groups of developed countries have even left behind the effects of the 2009 crisis. In fact, today several of them could think about withdrawing part of their monetary stimulus implemented in prior years. There is broad consensus that the world economy will continue this path of self-sustained recovery over the next year, in both developed and emerging markets. Since Chile is a very open economy that is highly integrated into international trade, these conditions certainly provide good news and will contribute positively to a stronger Chilean economy. However, we must be aware that recovery is not 100% guaranteed and there are risks that must still be monitored.

GF: Can you share your view of the medium- to long-term outlook on the Chilean economy regarding potential growth and productivity? What sectors of the economy—global or national—hold the most promise?

Aravena: Chile has experienced a drop in potential growth, from figures just above 4% early in the decade to around 3% in recent years. While a large part of this moderation can be attributed to the end of the mining cycle, we cannot remain indifferent to the lack of growth in productivity. There is no doubt that acceleration of Chile’s long-term growth is needed to improve this. The country has all of the conditions to move forward on the path toward becoming a developed nation. It has the highest GDP per capita in the region, rules for fiscal and monetary policy (that bring stability to economic cycles), low levels of debt and inflation, and strict regulation, among other advantages. Chile has successfully established sound institutions and clear rules. Now it is time for us to worry about perhaps more micro elements that favor greater sector diversification, reduce bottlenecks and promote more flexibility in the mobility of factors of production.

GF: What are the key financial issues that Chile faces as a nation?

Aravena: Chile has managed to build a sound financial system, with banking penetration close to 90% of GDP and deep long-term markets. This has paved the way for low-cost savings and investment, creating better possibilities for consumption and well-being. However, we are presently facing a series of challenges, two of which I would like to highlight. The first involves implementing changes made to the General Banking Law, including the creation of the new Financial Markets Commission and convergence to Basel III. Another aspect concerns modifications that may be introduced to the pension system, which has played a key role in the development of the Chilean capital markets.

GF: How do you see the future expansion of Banco de Chile?

Aravena: Banco de Chile is a universal bank that has accompanied Chile’s development for over 120 years and has served diverse customer segments throughout the country, from consumer finance to large multinationals. We have led the local banking industry in diverse aspects, characterized by responsible growth that always takes into account the long-term sustainability of our customers and society in general. That is the foundation that has guided and will continue to guide our actions in the long term.                              


This interview has been edited for length. The full interview is available on our website at