Chile's Stock Market Hit an All Time High the Day a New President Took Office. Copper Explains Why.
Chile's IPSA stock index hit an all-time high of 11,721 points on the day President Jose Antonio Kast was inaugurated, a striking signal from markets about expectations for the country's new pro investment direction. Understanding why requires understanding copper, which still accounts for roughly 50% of Chile's export revenue and shapes nearly every part of the national economy.
Chile remains the world's largest copper producer, accounting for an estimated 5.3 million tonnes in 2025, close to a quarter of global mine output. Analysts forecast refined copper prices of $11,400 to $12,500 per tonne for 2026, with a cumulative global supply deficit of around 3 million tonnes expected through 2036 as demand from electric vehicles, power grids and offshore wind continues climbing. A single offshore wind turbine alone requires roughly three to four tonnes of copper per megawatt of capacity.
Inflation in Chile fell to 2.4% year on year in February 2026, the first reading below 3% since early 2021, allowing the central bank to hold its policy rate at 4.5% after 675 basis points of cumulative cuts. Real wages have been climbing too, supported by a 51% nominal minimum wage increase since 2022 and a reduction in the standard work week from 45 to 40 hours.
Kast's April 2026 reform package is the most ambitious pro investment legislative push the country has seen in years, including a corporate tax cut from 27% to 23% and roughly $1.4 billion in payroll credits for small and medium businesses. Chile's economy grew 2.5% in 2025 and is forecast to expand between 2.0% and 2.4% in 2026.
The risks remain concentrated where they have always been. Around 39% of Chilean exports go to China, meaning any slowdown there hits Chile directly. Codelco, the state copper company, has pushed its peak production timeline back from 2027 to 2034 due to ageing infrastructure and over $20 billion in debt. For investors, Chile in 2026 is a bet that copper's structural demand story outweighs these near-term operational challenges.
