By Aida Pelaez-Fernandez and Fabian Cambero
SANTIAGO, March 18 (Reuters) - Chile's economy grew more slowly in 2025 than in the previous year, despite returning to growth in the fourth quarter.
Full-year GDP expanded 2.5%, central bank data showed on Wednesday, down from a revised 2.8% in 2024.
"The figure still falls short of Chilean families' expectations," the Finance Ministry said in a statement.
President Jose Antonio Kast took office last week, vowing to stamp out what he calls the fiscal mismanagement
left behind by leftist predecessor Gabriel Boric.
Still, the economy was supported by domestic demand in 2025, and grew slightly faster than the 2.4% forecast by the central bank.
Kast aims to leave office with economic growth at around 4%, Deputy Finance Minister Juan Pablo Rodriguez said in the statement, despite plans to slash public spending.
The government's program to improve public finances would include spending cuts of nearly $4 billion, with the first measures expected to be carried out this month.
"The energy price spike and fiscal tightening planned under President Kast will cause the economy to weaken in the coming quarters," Capital Economics analyst Kimberley Sperrfechter said.
In 2026, Chile's economy is expected to grow 2.4%, according to the latest government estimates.
In the fourth quarter, Chile's economy grew 0.6% from the previous quarter, central bank data showed, rebounding from a revised 0.3% contraction in the third quarter.
That was above the 0.3% quarter-on-quarter increase forecast by economists in a Reuters poll.
Mining output in the quarter rose 0.4%, the central bank said.
From a year earlier, GDP grew 1.6% in the fourth quarter, compared with economists' forecast of 1.7%.
(Reporting by Aida Pelaez-Fernandez and Fabian Cambero; Editing by Gabriel Araujo and Alison Williams)
