Chile is located in South America forming a long narrow strip between the Pacific Ocean to the west and the Andes Mountains to the east. Peru is at its northern tip, Bolivia is located to the north east, and Argentina forms a predominant border with the country to the east. The Pacific islands Juan Fernandez, Salas y Gomez, Desventuradas and Easter Island also belong to Chile. Chile is considered to be one of South America’s most stable and prosperous nations; however, in the past few years, economic growth has faltered slightly, mainly due to the country’s dependence on copper production. Another weakness is the fact that Chile has yet to address its increasingly uneven wealth distribution throughout the country.
While Chile's economy has been historically strong, GDP decreased slightly in 2015 and 2016, due to falling growth rates. Around the same time, other economic indicators showed a decline, even if only slightly. Chile produces far more than copper than any other nation, but production faltered a bit in 2011 and 2012. From 2014 through 2016, the inflation rate rose more than usual, but it is projected to return to normal for the foreseeable future.
Chile’s trade balance is quite unstable, it was in the red in 2012 and 2013, as well as in 2015, but in 2016, it returned to a surplus once again. China and the United States are Chile’s most important trade partners for both imports and exports. Services generate the largest share of the economy, followed by industry, while a small share pertains to agriculture. The distribution of employment by economic sector almost mirrors that of the distribution of GDP except a larger share of employment comes from the agricultural sector accompanied by a slight reduction in employment in the industrial sector. GDP per capita was estimated at 14,314 U.S. dollars in 2017 and is expected to increase over the next few years.
Chile was ranked as one of the top 20 countries for having the biggest inequality in income based on the Gini index in 2015. In order to remain a stable and prosperous nation, this problem needs to be addressed. Additionally, diversifying its economic base beyond copper could also help stabilize the economy further, although Chile is the world's largest producer now.
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