Spending Pressures, Subdued Growth Pose Medium-Term Fiscal Risks for Chile

 

Subdued growth prospects and high social spending pressures will make it challenging for Chile (A-/Stable) to meet medium-term fiscal targets, Fitch Ratings says. The central government (CG) 2023 deficit of 2.4% of GDP contrasts with 2022’s 1.1% surplus and would have been wider without profit transfers from state-owned companies. The deterioration reflects an economic slowdown, a hit to income tax receipts as pandemic support wound down and lower copper prices. Fiscal expenses rose due to higher pension benefits and salaries.

https://www.fitchratings.com/research/sovereigns/spending-pressures-subdued-growth-pose-medium-term-fiscal-risks-for-chile-19-03-2024