RIO DE JANEIRO, BRAZIL – Chilean President Sebastián Piñera on Thursday (23) presented a proposed US$82.1 billion budget for 2022 that he said would begin to bring the world’s largest copper producer’s growing deficit under control after more than a year of emergency spending to combat the coronavirus pandemic.
In a televised speech, the center-right ruler said the budget would reduce the structural deficit from 11.5% of the gross domestic product in 2021 to 3.9% of GDP in 2022.
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“This represents a great and necessary step forward in recovering fiscal balances, stabilizing public debt, and strengthening the permanent pillars of our country’s economic growth and human development,” Piñera said.
The Chilean economy has recovered after months of stagnation caused by the coronavirus, thanks to a rapid and massive vaccination campaign and a series of stimulus measures implemented by the government.
But the measures, Piñera said, have caused the budget for 2021 to balloon by US$27 billion, 33.7% above what lawmakers approved last year, a total equivalent to almost 10% of GDP. “This level of fiscal deficit and this increase in public debt is not sustainable over time,” he argued.
The budget would reduce spending by about 22.5% from the projected 2021 total, including emergency measures, but still represents a 3.7% increase over the 2021 base budget initially approved by lawmakers last year, he noted. The budget allocates new funds for housing, public works, and infrastructure for Santiago’s 2023 Pan American Games and a strong emphasis on healthcare.
Piñera said Chile, one of the first countries in the world to begin administering Covid-19 booster vaccines, has already secured the doses it needs for 2022.
The budget, he said, also dedicates funds to combat a debilitating drought that has swept through much of central and northern Chile, as well as climate change.
Lawmakers now have 60 days to review and approve the proposal.