Sound fundamentals and strong macroeconomic management have provided a buffer against the global economic recession, which nevertheless hit Chile both through a sharp deterioration in its terms of trade and the collapse of world trade. There was room for decisive macroeconomic stimulus thanks to sound monetary policy and prudent fiscal policy during the boom years. This, together with the rebound in copper prices – Chile’s main export – and the revival of global trade, has contributed to a turnaround in activity. The economy is now coming out of recession, yet unemployment is projected to remain initially high and inflation is likely to stay low. Macroeconomic policy should thus remain supportive in the near term. Assuming that the recovery becomes more robust, as projected, policy stimulus should be gradually withdrawn so as to set growth on a medium-term sustainable and non-inflationary path.