Chile Experiences First Decline in Company Numbers in a Decade
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Loading... - Aiden Connolly
- 25 Oct 2024
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In 2023, the Chilean economy faced significant challenges, culminating in a notable decline in the number of companies operating within the country. According to the Central Bank, Chile's gross domestic product (GDP) experienced a modest growth of just 0.2%, a stark contrast to the 2.1% expansion in 2022 and the remarkable 11.3% surge in 2021.
For the first time in over a decade, the number of companies in Chile decreased. The Internal Revenue Service (SII) reported a 0.6% reduction in businesses for the 2024 tax year compared to the previous year, bringing the total number of companies down to 1.5 million—a decrease of 8,416 from 2022. This decline marks a significant shift in a trend that had seen consistent growth since 2010, including a 1.3% increase in business numbers during the COVID-19 pandemic in 2020.
The economic slowdown has also affected other key indicators. Total sales in 2023 amounted to 32,676 million UF (approximately US$952.83 million), reflecting a 9.8% annual decrease. This decline in sales surpassed the 8.3% drop observed during the health crisis in 2020. Additionally, the number of dependent workers in Chile fell by 4.8% in 2023, resulting in 488,000 fewer employees compared to the previous fiscal year, with the total number of dependent workers reaching 282 million.
The data reveals significant disparities among different segments of taxpayers. Large companies, which constituted only 1.1% of the total number of businesses, accounted for a staggering 87.5% of total sales and 49.4% of dependent workers in the country. In contrast, micro, small, and medium-sized enterprises (MSMEs) represented 79.4% of all businesses but contributed only 12.5% of total sales and 42.9% of employment.
These figures underscore the ongoing economic challenges facing Chile as the country grapples with the aftermath of the pandemic and broader economic shifts. The decline in business numbers signals a changing landscape for Chilean enterprises, highlighting the need for strategic responses to support economic recovery and growth.
As Chile navigates these challenges, it will be crucial for policymakers to implement measures that foster a more resilient business environment, particularly for MSMEs, which play a vital role in the economy despite their lower sales contributions. The current economic climate calls for renewed focus on innovation, investment, and support for businesses to adapt and thrive in a post-pandemic world.
