nuam Collaboration

In recent years, our country has had the lowest growth since the return to democracy. The figures have been below 3%: 2.2% in 2022; 0.5% in 2023; and 2.6% in 2024.

Gone is the virtuous cycle that Chile experienced between 2000 and 2014, when sustained economic growth coincided with a profound transformation of our financial system. Per capita income increased, GDP grew at a real average of 4.5% per year and savings in pension funds went from representing 40% of GDP to close to 70%. In absolute terms, the funds managed by the AFPs jumped from US$ 30 billion to more than US$ 160 billion.

During the same period, stock market capitalization exceeded 100% of GDP and more than 30 companies were listed on the stock exchange, many of which began international expansion processes thanks to the financing available in the local market. It was a time of strategic vision and a sense of the future. As a country, we were committed to building a modern economy, connected to the world and capable of channeling savings into long-term investments. And as entrepreneurs, we took relevant risks, innovated, and scaled up.

This momentum was not accidental. It was closely linked to the existence of a robust capital market, with depth, liquidity and confidence. Because when the financial system works, so does the real economy: companies can grow, invest, hire and export. In other words, economic growth requires a dynamic capital market that acts as an engine of sustainable development.

However, since 2019, that engine has ground to a halt. Not a single IPO has been registered in the main market and a logic of risk aversion has set in, slowing investment and weakening growth. With no new issuers, no new projects, no appetite for financing the future, the market loses depth and the country loses opportunities. The consequence is clear: less employment, less innovation, less productivity.

This lack of appetite is clearly reflected in the substantial drop in equity investment by the AFPs in Chile. According to figures from the Superintendency of Pensions, in 2010 the AFPs had 18.52% of investment in domestic equities (see chart), a figure that has only decreased over time. Although some occasional increases have been observed, these are minimal and well below the historical record. Currently, the figure does not even reach double digits, standing at just 8.3%.

The good news is that there is still time. Initiatives such as ScaleX, a segment designed for emerging companies, show that there is a way to recover the path of dynamism. But to achieve this, we need a public policy that is determined to strengthen the stock market, to value well-taken risk and to generate the necessary conditions for more investors to want to participate in the country's development.

Growing again requires believing again. In the talent we have, in the projects that can be born and in the capacity of the capital market to channel that potential into the future.

Jaime Herrera

Entrepreneurship Business Unit Manager - nuam