On Friday, August 29, the Ministry of Finance will release the results of the long-term GDP and copper price projections, both of which are key variables in determining the fiscal space for public spending in the preparation of next year’s budget.
By Carlos Alonso
As part of the formulation of the 2026 fiscal budget, last Thursday the experts convened by the Ministry of Finance to project trend GDP and the long-term copper price delivered their projections. These variables are essential, as they define the structural parameters that determine the level of public expenditure consistent with fiscal policy targets. Once the experts’ estimates are delivered, the Ministry will publish the trend GDP and the long-term copper price
on August 29.
This year, 22 specialists were invited to join the Advisory Committee that calculated the non-mining trend GDP, of which 11 participated for the first time. The 2024 trend GDP committee, composed of 22 economists, set a trend GDP of 2.2% for 2025 and an average of 2.1% for 2025–2029. For this budget cycle, economists have indicated that they see no reason for that level to change, given the absence of reforms capable of boosting the country’s long-term growth.
Among this group of experts, projections ranged from 1.9% to 2.4%. However, they affirm that after the Ministry’s review process and methodological adjustments, the most likely scenario is that the trend GDP used as a reference for the 2026 budget will fall between 2.2% and 2.4%.
Felipe Alarcón, economist at Euroamérica, forecasts that the trend GDP will stand at 2%, arguing that there are no macroeconomic factors to justify a substantive increase in the long-term estimate. A similar view is held by former Budget Director and current academic at Universidad de los Andes, Matías Acevedo, who noted: “I do not see relevant changes in the non-mining trend GDP that would justify a significant revision compared to last year’s committee estimates.”
Juan Ortiz, economist at OCEC-UDP, projects a trend GDP of 2.2% for 2026. “This figure is fundamentally due to improved investment prospects impacting the economy’s capital stock, driven by permanent regulatory changes and better expectations in the mining sector. By contrast, no changes are expected in total factor productivity, which remains stagnant amid a weakened labor market, partially explained by rising labor costs and structural shifts in the post-pandemic period,” he stated.
And what about copper?
To calculate the medium-term copper price, 21 experts were convened, including 10 who participated for the first time this year. Among them was Juan Cristóbal Ciudad, Senior Market and Industry Analyst at Plusmining.
For this variable, committee members presented projections ranging between US$3.80 and US$4.40 per pound. Nevertheless, they indicated that after the Ministry’s methodological adjustments, the reference price for the budget would likely be around US$4 per pound, similar to the assumption used in this year’s fiscal framework (US$4.08 per pound).
Juan Carlos Guajardo, Executive Director of Plusmining, explained: “Beyond short-term volatility, which is inherent to this market, copper will remain on a structurally solid path. For the long term, we estimate a reference price of around US$4 per pound.”
According to the expert, “the main reason is that the energy transition and digitalization will continue to drive demand, while supply faces increasing challenges: higher costs, declining ore grades, and heightened socio-environmental scrutiny. This makes it unlikely that new supply will fully balance the strong growth in consumption, particularly in renewable energy, electric vehicles, and power grid expansion. The most recent mining project evaluations increasingly assume higher price levels, consistently above US$4 per pound.”
Ortiz, meanwhile, projects a reference price closer to US$4.20 per pound: “This is due to improving market outlooks associated with the push for electrification and copper demand, combined with structural supply limitations linked to ore grades, higher costs, and environmental constraints,” he concluded.
Source: La Tercera