Moody’s assures that if Chile rejects the new Constitution there will be “more uncertainty”

RIO DE JANEIRO, BRAZIL – The rating agency Moody’s said this Wednesday that if the Chileans reject the new Constitution that is being written in the September plebiscite, there will be “much more uncertainty”; and that the new text “is an opportunity to try to change the country”.

The main analyst for Chile of the rating agency, William Foster, affirmed that the “I Reject” option, unlike the “I Approve”, “will not stop people’s new desires for change”.

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“The people in Chile want changes, they want more government support, a new Constitution. It is an exercise that people decided months ago and the Constitution can be the vehicle to carry it out”, said Foster in a webinar to assess the effect of the proposed text on the economy of the world’s largest copper producer.

For the Moody’s analyst, one of the biggest risks if the new text is approved is how the new social rights will be financed in a scenario of economic slowdown and high inflation.

“Chile has had a fairly good debt record compared to peer countries. Today it is of the order of 35% of GDP (gross domestic product) and we are expecting 40% of GDP by 2023. This means a deterioration and that is why the way in which these rights will be financed is very important for the classification”, he added.

Since the beginning of April, several polls have placed the option of “I Reject” above “I Approve”, although experts point out that it is too soon and that the scenarios are very open.

With information from EFE