The lean banking behind Chile's comeback.(Business Credit)

Business Credit, July, 2004 by Hansen, Fay

Chile remains the center of growth and stability in Latin America, supported by booming export markets and a lean banking system that is quickly becoming a model for the region. GDP growth for 2004 should hit 4.5%, up from 3.3% in 2003 and 2.1% in 2002, but still well below the 7.3% average annual growth during the 1986-1997 boom years. Both consumer spending and business investment rose by more than 5% in the final quarter of 2003 on a year-ago basis, signaling a sharp upturn from lower growth earlier in the year.

The U.S. and Asian economic recoveries spurred Chilean growth in the last half of 2003 and the first half of 2004. Domestic demand boosted imports. Foreign investment in Chile has slowed from the high levels reported in the 1990s but should rise...