Country risk in Chile is low, and stands well above its Southern American neighbours. Chile’s risk ratings indicate that it has a low chance that it will be unable and/or unwilling to meet its external debt obligations. Though, needless to say, individual debtors and sub-sovereign entities can and do default.
The World Bank’s ease of doing business gauge—which measures regulation and red tape relevant to a domestic small to mid-sized firm—ranks Chile 55 out of 190 economies, well above the Latin America and the Caribbean average of 109. Chile ranks above the most of its regional peers on all of the ease of doing business categories.
Chile scores in the top quartile in almost all areas of the World Bank’s governance indicators. But violent demonstrations and petty theft could explain the relatively weaker political stability and absence of violence scores. Nevertheless, Chile remains amongst the best governed countries in Latin America.
The risk of expropriation in Chile is low, and its political risk is low to moderate. Sebastian Piñera was elected President for the second time in December 2017, and unveiled a four year, US$14b plan with the aim to reform the tax and pension systems, increase transparency around policymaking and promote infrastructure investment—all of which pose upside to Chile’s political risk rating.