Central Bank of Chile Reports Increased Financial Wealth on Paper Yet No Improvement for Chilean Families

Original article: Banco Central de Chile reporta más riqueza en el papel que no se traduce en mejoras a las familias chilenas

Chilean households’ net financial wealth reached a historic high of 124.8% of GDP in the second quarter of 2026, on paper, according to the Central Bank of Chile. However, while the regulator celebrates the increase in asset holdings, a report from the National Center for Alternative Development Studies (CENDA) reveals that the pension fund lost more than $18 billion just in September, and that the net return of the AFP system since its inception in 1981 has barely reached 0.6% annually. The gap between recorded wealth and the actual well-being of Chilean families has never been more pronounced.

By Bruno Sommer

The Paradox of Paper Wealth

The National Accounts report by Institutional Sector from the Central Bank for the second quarter of 2026, published on Monday, paints a picture of financial strength: Chilean households are richer than ever in financial terms. Their net wealth rose by 3.3 percentage points compared to the previous quarter, primarily driven by an increase in pension fund balances, which the Central Bank attributes to «the positive performance of international markets and new investments during the period.»

The issue is that this wealth is, to a large extent, an accounting mirage. Pension funds account for a significant portion of households’ financial assets, and their value fluctuates with international markets and exchange rates. When these markets decline, the wealth «on paper» evaporates.

September: The Blow the Central Bank Fails to See

The CENDA report, dated October 5, 2026, and based on monthly records from the Superintendency of Pensions, documents that the AFP fund lost more than $18 billion in September 2026, including $10 billion in just the first week of the month. Year-to-date losses are similar.

These losses do not appear in the Central Bank’s report because its reference period ends in June. The Q3 2026 report, which will be published at the end of the year, will likely reflect this deterioration. However, for Chilean families, the damage has already been done: the recovery that had been developing over the past two years came to a sudden halt.

«The significant recovery that had been ongoing over the last two years has been abruptly halted due to significant losses faced during this decade,» states CENDA.

45 Years of Forced Savings: The Returns No One Wants to Acknowledge

The CENDA report goes beyond the immediate situation and questions the very fundamentals of the Chilean pension system. According to their calculations:

• Gross earnings accumulated since 1981: approach $138 billion by mid-September 2026, nearly $40 billion below the historic peak of January 2021 ($179 billion in today’s currency).
• Losses in the current decade: reached up to $80 billion in October 2022 and again in October 2023, equivalent to about 40% of the maximum value achieved in January 2021.
• Internal Rate of Return (IRR) of net contributions from affiliates and the state since the system was established: 0.6% annual in dollars, 1.9% in UF.
• Net earnings of the fund accumulated since its creation: barely 10% of the fund as of September 2026, which has fallen to $228 billion.

In other words: after 45 years of forced savings, the net return of the AFP system is close to zero or negative in real terms. The net fees and commissions charged by the system—including what CENDA calls «phantom commissions» paid to stock market managers, around $20 billion—have consumed nearly all of the gross earnings.

The 10% Withdrawals: A Lifeline Hidden by AFP Propaganda

The AFP Association and its defenders have systematically attributed the fund’s decline to the «10% withdrawals» authorized during the pandemic. CENDA dismantles this fallacy with data:

«The withdrawals actually mitigated those losses, as they occurred between August 2020 and April 2021, precisely during the period when the gross earnings accumulated by the AFP fund reached their historic highs.»

A conservative estimate by IMACEI-CENDA indicates that nearly 40% of the withdrawn funds were saved from disappearing amid the subsequent financial losses. Without those withdrawals, about half of the money withdrawn by affiliates would have been lost in the market.

Wealth That Doesn’t Reach the Table

The contrast between the Central Bank’s report and CENDA’s findings exposes an uncomfortable reality: the financial wealth of Chilean households is high on paper, but it does not translate into better pensions or greater economic well-being for families.

While the Central Bank reports that households have a net wealth of 124.8% of GDP, CENDA documents that:

• The AFP system does not generate real net value for affiliates.
• The pensions paid by the system cover just over a third of AFP pensions, with direct fiscal subsidies covering nearly two-thirds of the cost.
• The contributions collected so far this decade—over $80 billion—have paid all net fees and commissions of the system, nearly all benefits withdrawn, and a good portion of the «10% withdrawals».

«This proves the fallacy of AFP propaganda which repeatedly blames recent fund losses on withdrawals, when in fact, it is primarily due to losses sustained by its investments during this period,» concludes CENDA.

The Central Bank of Chile reports that Chilean households are richer than ever. CENDA reports that the system managing that wealth loses money, charges exorbitant fees, and delivers net returns close to zero after 45 years.

Both statements are true. The net financial wealth of Chilean households reached on paper 124.8% of GDP in June 2026. And in September 2026, the AFP fund lost $18 billion.

The lingering question is simple: what good is being wealthier on paper if that wealth does not translate into better pensions, higher wages, or improved quality of life for Chilean families?

As Manuel Riesco, vice president of CENDA, writes: «Forced wage savings is one of the main abuses inherited from the dictatorship and exacerbated during the democratic system. Ending it is essential to overcome the political crisis.»

— With data from the Central Bank of Chile (National Accounts by Institutional Sector, Q2 2026) and CENDA (Monthly Indices of Internal Economic Activity, IMACEI, September 2026).

By Bruno Sommer

El Ciudadano