Chile’s Political Shift Reshapes Economic Landscape for Retail Titans

Chile is also turning to the extreme right. In the midst of a wave of political changes in the Southern Cone, the country is entering a new stage after the victory last Sunday of the republican candidate José Antonio Kast.

The president-elect of Chile comes from an ultra-conservative sector. Father of nine children and of German descent, Kast arrives at the Casa de la Moneda with 58% of the votes in his favor, a difference of 16 points against his communist rival Jeannette Jara in the ballotage that took place last Sunday.

Kast faces a fragmented congress, where he will not have a parliamentary majority, which introduces uncertainty about the speed and depth of economic reforms. However, the far-right candidate led a historic election: he won in all regions of the country and was the most voted candidate in Chile’s democratic history.

Gabriel Boric’s successor in power will have the mission of putting an end to a period of high economic and political volatility. Since Kast’s victory was announced, the market responded with optimism with the appreciation of the Chilean peso against the dollar.

Kast becomes Chile’s president with a pro-business discourse and the promise of stability

Business associations also showed their support for the new president-elect. José Pakomio, president of the National Chamber of Commerce (CNC), stressed the importance of Chilean SMEs in the country’s economy and the need to activate a security plan for economic activity.

Among the challenges facing the retail and consumer sector is informality. Kast’s campaign promises have been categorical in the face of this problem and the new president will arrive with policies of respect for norms and institutions in order to combat illicit trade.

The president of the Santiago Chamber of Commerce (CCS), María Teresa Vial, congratulated the new president and called for broad agreements with a long-term vision to ensure stability.

With an ultra-conservative social agenda and the intention of getting out of the economic stagnation, Kast will assume his presidency on March 11 in a challenging economic context for the country.

Giants such as Falabella or Cencosud could benefit from the appreciation of the Chilean peso

Despite Chile being one of the leading economies in South America, the country has not had the expected growth. In the third quarter of 2025, the Central Bank of Chile reported a 1.6% increase in GDP over the same period of the previous year, although below expectations.

The OECD, for its part, forecasts that the Chilean economy will grow by 2.4% this year, driven by domestic demand and investment, but with recommendations for fiscal adjustment and reforms to improve the efficiency of public spending and productivity.

Fashion looks sidelong

Following Kast’s victory and the market’s response, fashion and retail giants such as Cencosud, Falabella and Ripley are on alert. The exchange rate is a determining factor for this type of companies, whose fashion collections depend on international sourcing.

However, the impact on consumption will not be automatic. The new government’s economic agenda includes fiscal adjustments and containment of public spending, which could moderate domestic demand in the short term.

Chilean retail giants could benefit from a more stable economic environment, although they depend on domestic consumption, so purchasing power and consumer confidence will be key for the growth of Chilean retailers.

The country will enter a favorable stage for business, with direct implications for fashion. Less exchange rate volatility, greater predictability and a pro-business discourse are the signs that the sector has received with optimism.