Emering Mareting
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Emerging Markets Introduction The overall objective is overview of Chile country which is emerging market and analysis of the background and the current state of affairs how would it influence the country development in order to provide some recommendation.Overview of economicAccording to world Bank informed that Chile is one of South Americas most stable and prosperous nations, it has been relatively free of the coups.In Chile population figure in 2015 is 17.95 milliion, the population growth rate in 2014 is 0.84% and people in Chile their education level is high. (The World Bank, n.d.)[pic 1](WorldBank, n.d.)The GDP in Chile was worth 258.06 billion US dollars in 2014. The trade balance in Chile is record 744.79 USD million in 2016 according to Banco Central. (TradingEconomics, 2003-2016) .Investment in physical, as the companies, become more cautious, trend to reduce the oversea investment. Chile national institute of statistics reported that Inflation rate in Chile totally increased 4.2% in May of 2016.Chile short-term debit is lower than other country.Economic factors Chile is the freest country and fastest-growing economies in Latin America’s region.In 2014, the GDP in Chile was worth 258.06 billion US dollars. The GDP growth rate is stable and there is growth 1.9% in 2014. [pic 2] (TradingEconomics, 2003-2016)Balance of trade is the large component is Chile balance of payment. Balance of Trade in Chile averaged 477.01 USD Million from 1991 until 2016. In export, as Chile is the worlds largest copper producer so that they mainly export is a copper, chemical, and imports are petroleum, cars, machine and chemicals metals, it record that 4304.84 USD dollar. In the inflation rate, rose at a faster is in the food and non-alcoholic beverages from 3.4% to 4.2% and transport prices from 0.2% to 0.4%. The foreign direct investment rate in Chile is decreased 2822.87 USD Million in the first quarter of 2016 ,it observe that averaged -1604.50 USD Million from 2003 until 2016.Only in the first quarter of 2015 , reaching an all time high of 864.27 USD Million.
.[pic 3] As the Standard & Poors credit rating for Chile government stands at AA- with stable performance and it positively influence the country because of the country short-term debit is low. [pic 4]Characteristics and challenges in economicBased on the previous review, it found that there are some key characteristics of Chile economic.Characteristics Frist, the country economic is mainly was supported by copper export, occupy 49% of the total export, have largest and important raw martial resource country, it records that 5049.63 USD dollar in 2016 (TradingEconomics, 2003-2016). Chiles central bank released data show that in April 2016, Chiles copper exports reduced by 14.5% to $ 9.118 billion compared with $ 10.66 billion in 2015. (wong, 2016). Also, the second feature is Chilean education index is high. Chile has an adult literacy rate of 96.7% which is 4.72% higher than the world median (91.98%) , as the country finance additional expenditures is in education, people over 25 years old literacy rate is 99%. (OECD, 2016) The third one is the birth rate in Chile is decreasing. According to The World Blank data, it found that the birth index from 2000 year 15000 people to 13000 people in 2015, the population growth rate has been declining.[pic 5]ChallengesThe instability in export will adversely affect the country economic development and the external threat is the major factor to influence the export. In Chile, copper production company faced to the natural disaster affecting. In April 2016, due to the heavy rain, the copper firm closed temporarily. Another reason to affect the copper export is the demand of the other country, the lower demand in global copper demand increase slightly is the main reason. On the other hand, the opportunity in high education country number of citizens with a college degree and it relatively high in employment rate and rate of pay. It considers that the operating cost in high education country is higher than low skill country, it not attractive for the company to start-up the business, therefore ,the unemployment rate in Chile also rose slightly, from 5.7 percent in July 2013 to 5.8 percent in January 2016. (WorldBank).