External debt stabilizes after rebounding from recent lows
Recent dynamics
Chile's external debt ratio fluctuated considerably during the earlier part of the period, rising above 80% of GDP before declining sharply toward the upper-60% range.
The ratio subsequently recovered, returning above 80% before moderating again and spending most of the more recent period within the mid-to-upper 70% range.
During 2025, external debt moved from 75.32% of GDP to 74.76%, increased to 77.88%, and then declined to 74.35% by the end of the year.
The ratio then increased to 76.17% and remained virtually unchanged at 76.16% in the latest observation. This leaves external debt 1.40 percentage points above its level one year earlier.
Interpretation and economic signal
The latest readings suggest stabilization rather than a renewed acceleration in external indebtedness. The ratio has stopped rising sequentially and is essentially unchanged from the previous quarter.
The annual comparison is less favorable, however. External debt remains above its level one year earlier, indicating that the improvement observed during part of the previous period has been partially reversed.
A ratio around three-quarters of GDP represents a significant stock of external liabilities relative to domestic economic output. Its macroeconomic relevance nevertheless depends on the composition of those liabilities, including maturity, currency, sector, and financing structure.
Movements in the ratio can also reflect changes in the GDP denominator as well as changes in the underlying stock of external debt. A rising ratio therefore does not necessarily imply an equivalent increase in new external borrowing.
The current signal is consequently one of elevated but broadly stable external indebtedness. A sustained decline in the ratio would provide clearer evidence of reduced external leverage, while renewed increases would point to greater external balance sheet pressure.
Conclusion
Chile's external debt stands at approximately 76.2% of GDP, virtually unchanged from the previous observation but above its level one year earlier.
The recent stabilization is constructive after the preceding increase, although the debt ratio remains elevated relative to domestic economic output.
The current signal is therefore one of elevated external debt with broadly stable recent momentum rather than a clear deterioration or sustained deleveraging trend.