December 20, 2019
Investment

The current situation in Chile: impact on the economy and public finance

The current situation in Chile: impact on the economy and public finance
The Finance Ministry has prepared a document with investors in mind, explaining that the fundamentals of the Chilean economy remain solid.

The Finance Ministry has published a detailed explanation of the measures being taken by the government to mitigate the effects of recent events on the economy and public finance. In the report,  prepared with investors in mind, it explains the fiscal stimulus package for 2020 and its three pillars: protection of jobs and the family, working capital to support SMEs, and public investment in reconstruction.

The report also describes how acts of violence have been decreasing and points out that the economy’s fundamentals remain strong. “Our revised fiscal consolidation path balances the need to support the economy with the fiscal stimulus, address social and development needs, and stabilize debt in the medium term,” says the report.

It also sets out the main reasons why the fundamentals of the Chilean economy remain solid: a fiscal policy based on norms that protect the sustainability of public spending, accompanied by sovereign wealth funds that provide important support; a credible inflation target that permits implementation of effective countercyclical monetary policy, along with a floating exchange rate that facilitates the economy’s adjustment to external shocks; and a financial sector that is among the most developed in emerging markets.


Read the full report here (in English)