Chile public debt soars at the end of 2021 exceeding US$100 billion

RIO DE JANEIRO, BRAZIL – According to a report by the Budget Office (Dipres), the stock of the Central Government‘s gross debt rose to US$102.9 billion in the third quarter of 2021, surpassing the US$100 billion mark for the first time since records have been kept. It implies more than US$5 billion of increase concerning the close of the first half of the year.

Thus, the number of public sector commitments exceeds the total amount of the 2021 Budget, considered an emergency treasury to face the Covid-19 pandemic. Such expenditure reaches US$101.2 billion, an increase of 32.1% for 2020, also a record.

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As a proportion of Gross Domestic Product (GDP), it again broke a target, reaching 35.9%, 2.9 percentage points higher than in June and its highest proportion since 1991, when the ratio amounted to 37.4% of the size of the economy.

Gross public debt does not consider the level of public sector assets, nor does it include the claims of municipalities and public enterprises.

Of the total stock, the majority (US$67.1 billion) is debt placed in the local market, while the remaining US$35.8 billion was placed abroad. The latter implies growth of more than US$7 billion in only three months.

Another of the milestones of this figure is that as of September, the gross debt target projected by the Executive, which stood at 34.9% of GDP as of December of the year just concluded, had already been exceeded.

SPENDING CONTINUES TO GROW

Public sector growth accelerated in November. According to the Dipres, the total expenditure of the state apparatus recorded an expansion of 56.9% in the eleventh month of the year, well above the 24.1% of the previous month and accumulating an advance of 32% so far this fiscal year. The latter is higher than the 29.6% accumulated between January and October.

Current spending -which is related to the functioning of the State- grew by 68.5% in November, accelerating from 29.2% in October.

Capital expenditure, related to public investment and resource transfers, fell 2.3% in the penultimate month of the year, easing from October’s 5.1% drop. Investment grew 7.5% in 12 months, while capital transfers fell 12.2% in the period.

In the January-November accumulated period, current expenditure showed an expansion rate of 35%, while capital spending grew by 9.6%.