Mining production could fall by 9% or even 10%, Finance Minister Jorge Quiroz says. For Chile’s economy to end the year with positive growth, activity would need to accelerate in the fourth quarter—a development that the data, so far, do not support.
As he examined, before an audience of business leaders, the problems that have weighed on this government’s economic management during its first seven months, Finance Minister Jorge Quiroz had this phrase highlighted in his presentation:
“Uncertainty, pessimism.” It appeared as he listed everything from El Niño—with its effects on fishing, agriculture and mining—to the energy crisis stemming from international conflicts, as well as high public spending and a deep deficit that has been reined in. He compared the combination to the “seven plagues.” But a period of budgetary “moderation” with public investment is now coming, Quiroz announced, drawing applause from those attending the annual farmers’ gathering, Enagro (see B 2).
As he examined, before an audience of business leaders, the problems that have weighed on this government’s economic management during its first seven months, Finance Minister Jorge Quiroz had this phrase highlighted in his presentation: “Uncertainty, pessimism.” It appeared as he listed everything from El Niño—with its effects on fishing, agriculture and mining—to the energy crisis stemming from international conflicts, as well as high public spending and a deep deficit that has been reined in. He compared the combination to the “seven plagues.” But a period of budgetary “moderation” with public investment is now
coming, Quiroz announced, drawing applause from those attending the annual farmers’ gathering, Enagro (see B 2).
“Our estimate is that this effect alone will mean a decline of one percentage point of GDP. This effect alone, plus a second-round impact of another half a point: 1.5 percentage points of GDP,” he calculated. Economists clarify that this does not mean total GDP will fall by that amount, but rather that this is the impact other sectors of the economy will have to offset for activity as a whole to stay afloat this year. And that does look complicated.
“We are close to negative territory”
At Itaú, Latin America Chief Economist Andrés Pérez explains that, “given that copper mining accounts for around 10% of GDP, a production decline of the magnitude indicated would subtract approximately 1 percentage point from growth for the year through direct effects alone.” In light of this, he warns: “Ending the year with positive GDP growth becomes even more challenging, particularly considering disruptions in other natural resource sectors and weak domestic demand. Achieving growth this year requires a substantial acceleration in activity in the fourth quarter, something not evident in high-frequency data and leading indicators.”
Bci Chief Economist Sergio Lehmann says El Niño was already reflected in the July and August Monthly Economic Activity Index readings, known as Imacec, and that “we will also see some effect on growth dynamics in the fourth quarter.”
“We are close to negative territory,” says Carolina Grünwald, Chief Economist at Prudential AGF.
Rodrigo Montero, Dean of Economics at Universidad Autónoma, calculates that “to fully offset the mining decline and avoid a contraction in GDP, the remaining sectors would have to grow by approximately 1.2% to 1.5%.”
For the third quarter, Itaú estimates a year-on-year GDP decline of between 1.0% and 1.5%.
At Ocec-UDP, the baseline scenario already points to a possible contraction in the third quarter. Researcher Valentina Apablaza qualifies this by noting that, whether there is expansion or contraction, it will be limited in magnitude and, in either case, consistent with an “outlook of economic stagnation.”
Grünwald points to an underlying problem: “We are highly exposed to supply shocks—weather, mining and oil—because domestic demand is very weak.”
Too pessimistic?
Among mining specialists, Quiroz’s figure raises concerns. The minister “is very pessimistic about mining activity, considering its performance during the first eight months of 2026,” says Álvaro Merino Lacoste, Executive Director of Núcleo Minero.
But he also takes issue with the Budget Directorate’s third-quarter Public Finance Report, which projects a 3.3% mining decline: “I consider it very optimistic, given performance during the first eight months, when, according to the Central Bank, mining GDP fell by 6.5%.”
For a decline of between 8% and 9%—Quiroz’s central scenario—to materialize, Merino calculates that mining would have to contract by between 11% and 14% in each of the next four months, “which is very unlikely.”
Between January and August, Merino explains, copper production fell by 7.7%, or 271,000 tonnes, while molybdenum production declined by 13.9%. Gold production, by contrast, rose by 17.7%, and silver production by 8.6%.
At Plusmining, “we project a 6.6% decline” in copper production. “We expect the decline to moderate in the latter part of the year, provided there are no extreme weather events,” says its Executive Director, Juan Carlos Guajardo.
UC academic Gustavo Lagos projects a 4.3% decline in mining production compared with 2025.
Merino estimates that the country will end the year with copper production “close to 5.15 million tonnes, the lowest level since 2003.” For 2027, he expects the trend to reverse, with “production close to 5.5 million tonnes.”
Source: El Mercurio