July 30 (UPI) -- Chile's projected fiscal deficit for 2025 has risen from to 1.8% from 1.6% of gross domestic product, according to recent statements by the economic team in President Gabriel Boric's administration.
While the revision may seem small, it marks a failure to meet the government's target for maintaining a structural balance. The change has raised concerns, casting doubt on the credibility of Chile's fiscal rule -- a key pillar of the country's macroeconomic stability.
Budget Director Javiera Martínez and Finance Minister Mario Marcel said the weaker projections are the result of several factors, including a downward revision in revenues, a significant correction in projected tax collection and continued difficulty in containing public spending.
To address the growing fiscal deficit, the administration plans to introduce and prioritize a series of bills aimed at improving the efficiency of public spending. The proposed measures are expected to help reduce the structural deficit by 0.25 percentage points.
The goal is to reduce the deficit to 1.6% of GDP by 2025 to comply with the country's fiscal responsibility rules.
