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MARCH, 2014 ECONOMIC OUTLOOK AND BUSINESS OPPORTUNITIES IN CHILE Slide 2 Population16,572,475Area 756,096.3 km2 GDP PPP $319.4 billion GDP Per Capita PPP $18.354 Unemployment Rate (Average) 6.0 % Economic Growth 4.1% 2013 Inflation 2.8% 2013 Exports $78.8 billion Imports $74.6 billion Current account -3.4 (% of GDP) Slide 3 Relative Size of Latin America Economies GDP, Current Prices Billions US$ of 2012 Source: IMF Slide 4 Evolution of GDP (% of change) Source: IMF, Central Bank of Chile Slide 5 Fuente: FMI Slide 6 Source: Banco Mundial Slide 7 Fuente: FMI Slide 8 Inflation Evolution (% of change, end of period consumer prices ) Source: INE Slide 9 General government net debt (Percent of GDP, 2012e) Source: IMF Slide 10 Source: Central Bank of Chile Investment Evolution (% of GDP, constant prices) Slide 11 Source: INE Slide 12 Oct-12 Slide 13 Trade Evolution (12 month moving average, Millions of US$) Source: Central Bank of Chile Slide 14 A country with an open economy: 22 Free Trade Agreements with 60 countries. Turkey Ecuador Colombia Australia Peru Cuba Panama Japan India P-4 China EFTA Korea United States European Union Central America Mexico Canada MERCOSUR Venezuela Bolivia Malaysia Nicaragua Thailand Hong Kong Vietnam 63% of world population 86% of the global GDP 90.5% of Chiles export markets Agreements In force Agreements signed but not yet in force Agreements under negotiation Globally integrated economy Government of Chile| Foreign Investment Committee Slide 15 Main Chilean Exports (Countries) Millions of US$, 2012 Slide 16 Main Chilean Exports (by Sector) Millions of US$, 2012 Slide 17 Main Chilean Imports (Countries) Millions of US$, 2012 Source: Central Bank of Chile Slide 18 Exports 2011 Imports 2011 Market Diversification of Trade Slide 19 Outstanding Business Environment Government of Chile| Foreign Investment Committee Doing Business 2013 Competitiveness Yearbook 2012 (37 out of 185 economies)* *Selected economies. Category Pos. Protecting investors32 Chile leads Latin America. Economic Freedom Index 2013 Slide 20 Source: SOFOFA Investment Projects By Sector (Mill. Of US$) Slide 21 FDI in Latin America and Caribbean, 2012 Gobierno de Chile | Comit de Inversiones Extranjeras Latin America and Caribbean: Largest FDI recipients, 2011-2012 (US$ billion) Variation in FDI flows, 2012 (%) Source: Global FDI fell by 18% in 2012 to US$1.3 trillion, down from US$1.6 trillion in 2011. By contrast, FDI in Latin America and the Caribbean rose by 7.2% to US$232 billion. According to UNCTADs estimates for 2012, Chile was for the first time Latin Americas second largest recipient of FDI; the inflow reached US$30.3 billion, the highest ever in the countrys history. Sources: Global Investment Trends Monitor, UNCTAD 2013 / Central Bank of Chile Slide 22 Total FDI in Chile, 2003-2012 Gobierno de Chile | Comit de Inversiones Extranjeras Source: Central Bank of Chile FDI in Chile, 2003-2012 (US$ million) In 2012, Chile achieved a new record as a recipient of FDI. According to UNCTAD, Chile was one of the seven economies in which the inflow of FDI showed the highest growth in the last year. In 2012, Chile received FDI worth US$30,323 million; this represented an increase of 32.2% on 2011 and set a new record. Slide 23 Chile has 27.5% of world copper reserves (USGS). Worlds largest producer: copper (34%), natural nitrates (100%), iodine (58%), Rhenium (52%), Lithium (45%) and 5 th largest silver producer. Mining companies plan to invest US$104 billion during the next eight years. Chile in 5th place in Current Mineral Potential Index (Fraser Institute). Expenditure by mining companies is over US21 billion per year. There are around 4000 supplier companies. Government of Chile| Foreign Investment Committee Mining Opportunities Equipment and supplies. Engineering and consulting. Construction. Production support services. Mining suppliers to create regional headquarters, export and diversify area of activitiy. Slide 24 Challenges Chiles total installed capacity is 17,000MW. Electricity consumption expected to grow 6% to 7% annually. Need to become independent in terms of energy supplies. Need to diversify energy supplies. Government of Chile| Foreign Investment Committee Energy Opportunities Generation: More than 8,000MW of new projects required by 2020. Natural conditions suitable for Non-Conventional Renewable Energies. Transmission challenges. Slide 25 Chile has an investment portfolio of an aggregate amount of US$7,7 billion in public tenders. Government of Chile| Foreign Investment Committee Infrastructure Highway Projects Route G21, Access to Ski Centers in the Metropolitican Reigon 87 Amrico Vespucio East Highway1,535 Costanera Central Highway 2,065 Santiago Lampa Highway116 Highway Connection between Routes 68 and 78131 Nahuelbuta Highway 259 Industrial Bridge over Bio Bio River 212 San Fernando Santa Cruz Road151 Subtotal4,556 Main projects in Public Works Concessions System 2013 -2014, figures in USD millions Slide 26 FRUITS Worlds largest exporter of table grapes, plums and blueberries, and top 3 in avocado, kiwi, raspberries and apples. New opportunities: Berries. Cherries. Walnuts. Government of Chile| Foreign Investment Committee Food industry WINE Worlds 5th largest producer. New opportunities: Organic wine. Functional foods based on grape sub-products. Grape-seed oil. SALMON FARMING Worlds second largest producer. Opportunities: Salmon food. Cage services. Slide 27 CHILE THAILAND TRADING CHILE THAILAND TRADING (figures in million US$) Source: LegalPublishing Slide 28 MAIN PRODUCTS EXPORTED TO THAILAND MAIN PRODUCTS EXPORTED TO THAILAND (figures in million US$) Source: LegalPublishing Slide 29 MAIN PRODUCTS IMPORTED FROM THAILAND MAIN PRODUCTS IMPORTED FROM THAILAND (figures in million US$) Source: LegalPublishing Slide 30 MAIN EXPORTERS TO THAILAND MAIN EXPORTERS TO THAILAND (figures in million US$) Source: LegalPublishing Slide 31 MAIN IMPORTERS FROM THAILAND MAIN IMPORTERS FROM THAILAND (figures in million US$) Source: LegalPublishing Slide 32 MAIN DESTINATIONS OF OUR EXPORTS MAIN DESTINATIONS OF OUR EXPORTS (figures in million US$) Source: LegalPublishing Slide 33 MAIN ORIGINS OF OUR IMPORTS MAIN ORIGINS OF OUR IMPORTS (figures in million US$) Source: LegalPublishing Slide 34 HOW MUCH DO EXPORTS TO THAILAND REPRESENT IN OUR WORLD EXPORTS HOW MUCH DO EXPORTS TO THAILAND REPRESENT IN OUR WORLD EXPORTS (figures in million US$) Source: LegalPublishing 0.32% Slide 35 HOW MUCH DO IMPORTS FROM THAILAND REPRESENT IN OUR WORLD IMPORTS HOW MUCH DO IMPORTS FROM THAILAND REPRESENT IN OUR WORLD IMPORTS (figures in million US$) Source: LegalPublishing 1,01% Slide 36 MARCH, 2014 ECONOMIC OUTLOOK AND BUSINESS OPPORTUNITIES IN CHILE