SANTIAGO, Chile, May 8 (UPI) -- An economic reform plan Chilean President José Antonio Kast announced to revive the country's economy is drawing criticism over its potential short- and medium-term fiscal impact, as the International Monetary Fund lowered its growth projections for Chile.
The IMF's World Economic Outlook report had estimated in mid-April that Chile's gross domestic product would grow 2.4% in 2026 and 2.6% in 2027. However, the organization said this week it revised those projections to 2.2% this year and 2.5% in 2027 if external conditions and the country's fiscal situation improve.
"Economic activity, driven by investment and exports in 2025, faces a period of heightened uncertainty," the IMF said.
The report said higher copper production and prices support growth expectations, but warned of risks that include the crisis in the Middle East, rising oil prices and loss of domestic competitiveness tied to the sharp public spending cuts promoted by Kast.
The Chilean president's plan includes proposals to reduce corporate taxes and cut bureaucracy in an effort to stimulate private investment. Congress is discussing tha proposal.
