Sami Uddin
Learning Aim C: Investigate the external factors that influence international business
P5: Explain the external factors that influence a selected business considering trading
internationally
Chile GDP Growth Rate
The GDP growth rate shows how fast the economy is growing in a country. The economy in Chile has
increased to 5.2% on quarter in the three months to September 2020 as restrictions eased it meant
that people were able to go to work and businesses being able to open again, recovering from an
upwardly revised record of 13.5% contraction in the previous period and beating market
expectations of a 4.9% expansion, along with the easing coronavirus lockdown restrictions that has
had an impact on Chile GDP growth rate as people couldn’t work during the lockdown and business
being forced to shut leads to huge losses for both business and people.
tradingeconomics.com/indicators
Chile Interest Rate
Interest rates is the amount a person charges for the use of assets that is then expressed as a
percentage. The interest rate for Chile is currently at 0.50% whereby the central bank held its
benchmark interest rate. The country’s central bank held their benchmark interest rate at a record
low of 0.50% on the 7th December 2020 as mainly expected. However, the domestic economic
activity for October came below expectation and decreased by 1.2%. From looking at the graph it
has a gradual decrease from 1996 to 2020. Chile has
kept its interest rate steady due to the successive cuts
through late March as it was warned about a severe
economic contraction as a result of the coronavirus
pandemic as during lockdown businesses have had to
shut and people not being able to work. The
policymakers wanted to make a push to stimulate the
economy of the world’s best top copper producing
country. What it means by stimulating the economy is
, Sami Uddin
being able to increase or decrease government spending on projects, this can lead to an increase in
employment and also economic growth.
Chile Inflation Rate
Inflation rate is a sustained increase in the normal price level in an economy and this means that the
price of goods and services will increase as well. The yearly inflation rate in Chile increased up to 3%
in December 2020 from 2.7% in the previous month and it mainly increased up by higher prices of
food and also non-alcoholic beverages. However, the costs for transports and communications
decreased significantly due to the lockdown people couldn’t go anywhere. The inflation rate for
Chile in 2019 was 2.56% which was a 0.12% increase from 2018. This will have an impact on Chile as
workers will want to expect higher wages to cope with increasing costs of things.
tradingeconomics.com/indicators
Chile Unemployment Rate
The unemployment rate in Chile has increased to 10.8% in the three months up to November 2020.
The unemployment rate in 2019 for Chile was only 7.09% which is a 0.14% decrease from the 2018
unemployment rate. By having huge unemployment rate it will affect the economy for Chile.
Chile Government Debt to GDP
The debt to GDP shows how significant the debt is in relation to the size of the economy. Chile have
a government debt that is equivalent to 27.9% of the country’s Gross Domestic Product in 2019.
They are borrowing heavily to keep country is financially stable and so that people are not in a
disadvantaged position. If the government debt keeps increasing it will be less likely that the country
will pay back it’s debt and the higher risk of default.
tradingeconomics.com/indicators
Chile Balance of Trade
Trade surplus is an economic measure of a positive balance of trade whereby a country’s exports will
go over the imports. Chile’s trade surplus shrank to USD 1,423 million in December 2020 from USD
1,523 in the same period of the previous year, the way this can impact on Chile is that it can create
employment and economic growth. The imports rise to more than 9% over a year earlier to USD
5,721 million due to higher purchases of consumption goods and intermediate goods, with this
increase it can affect the exchange rate which therefore leads to imports being very expensive.
tradingeconomics.com/indicators
Chile Corporate Tax and Sales Tax Rate
The corporate tax rate in Chile was averaged 19.08% from 1997 up to 2020 reaching an all-time high
of 27% in 2019 and with a record low of only 15% in 1998. The sales tax rate in Chile was averaged
stands at 19%.
Chile PESTLE Analysis
Political
The political factor for Chile would be that there are international regulation along with restrictions
regarding trade, the trade restrictions that Chile have is that they have very few barriers to imports
only allowing foreign firms access to the protections and operate under the same conditions local
Learning Aim C: Investigate the external factors that influence international business
P5: Explain the external factors that influence a selected business considering trading
internationally
Chile GDP Growth Rate
The GDP growth rate shows how fast the economy is growing in a country. The economy in Chile has
increased to 5.2% on quarter in the three months to September 2020 as restrictions eased it meant
that people were able to go to work and businesses being able to open again, recovering from an
upwardly revised record of 13.5% contraction in the previous period and beating market
expectations of a 4.9% expansion, along with the easing coronavirus lockdown restrictions that has
had an impact on Chile GDP growth rate as people couldn’t work during the lockdown and business
being forced to shut leads to huge losses for both business and people.
tradingeconomics.com/indicators
Chile Interest Rate
Interest rates is the amount a person charges for the use of assets that is then expressed as a
percentage. The interest rate for Chile is currently at 0.50% whereby the central bank held its
benchmark interest rate. The country’s central bank held their benchmark interest rate at a record
low of 0.50% on the 7th December 2020 as mainly expected. However, the domestic economic
activity for October came below expectation and decreased by 1.2%. From looking at the graph it
has a gradual decrease from 1996 to 2020. Chile has
kept its interest rate steady due to the successive cuts
through late March as it was warned about a severe
economic contraction as a result of the coronavirus
pandemic as during lockdown businesses have had to
shut and people not being able to work. The
policymakers wanted to make a push to stimulate the
economy of the world’s best top copper producing
country. What it means by stimulating the economy is
, Sami Uddin
being able to increase or decrease government spending on projects, this can lead to an increase in
employment and also economic growth.
Chile Inflation Rate
Inflation rate is a sustained increase in the normal price level in an economy and this means that the
price of goods and services will increase as well. The yearly inflation rate in Chile increased up to 3%
in December 2020 from 2.7% in the previous month and it mainly increased up by higher prices of
food and also non-alcoholic beverages. However, the costs for transports and communications
decreased significantly due to the lockdown people couldn’t go anywhere. The inflation rate for
Chile in 2019 was 2.56% which was a 0.12% increase from 2018. This will have an impact on Chile as
workers will want to expect higher wages to cope with increasing costs of things.
tradingeconomics.com/indicators
Chile Unemployment Rate
The unemployment rate in Chile has increased to 10.8% in the three months up to November 2020.
The unemployment rate in 2019 for Chile was only 7.09% which is a 0.14% decrease from the 2018
unemployment rate. By having huge unemployment rate it will affect the economy for Chile.
Chile Government Debt to GDP
The debt to GDP shows how significant the debt is in relation to the size of the economy. Chile have
a government debt that is equivalent to 27.9% of the country’s Gross Domestic Product in 2019.
They are borrowing heavily to keep country is financially stable and so that people are not in a
disadvantaged position. If the government debt keeps increasing it will be less likely that the country
will pay back it’s debt and the higher risk of default.
tradingeconomics.com/indicators
Chile Balance of Trade
Trade surplus is an economic measure of a positive balance of trade whereby a country’s exports will
go over the imports. Chile’s trade surplus shrank to USD 1,423 million in December 2020 from USD
1,523 in the same period of the previous year, the way this can impact on Chile is that it can create
employment and economic growth. The imports rise to more than 9% over a year earlier to USD
5,721 million due to higher purchases of consumption goods and intermediate goods, with this
increase it can affect the exchange rate which therefore leads to imports being very expensive.
tradingeconomics.com/indicators
Chile Corporate Tax and Sales Tax Rate
The corporate tax rate in Chile was averaged 19.08% from 1997 up to 2020 reaching an all-time high
of 27% in 2019 and with a record low of only 15% in 1998. The sales tax rate in Chile was averaged
stands at 19%.
Chile PESTLE Analysis
Political
The political factor for Chile would be that there are international regulation along with restrictions
regarding trade, the trade restrictions that Chile have is that they have very few barriers to imports
only allowing foreign firms access to the protections and operate under the same conditions local
