• version imprimible
Wednesday, June 6 de 2018

Minister of Finance Reports the Government’s Fiscal Commitment: Structural deficit will reach 1% of GDP in 2022

To converge to this goal, the deficit will be reduced annually by 0.2 percentage points of GDP, starting in 2018.

The Minister of Finance, Felipe Larraín, announced today the decree that establishes the fiscal commitment from 2018 to 2022 of the Government of Sebastián Piñera, in compliance with the Fiscal Responsibility Law.

Together with the Budget Office Director -Rodrigo Cerda, the Minister Larraín explained that the fiscal target for the next four years implies an annual reduction of 0.2 percentage points of GDP of the structural deficit, currently at 2% of GDP. Thus, in 2022 - the last budget to be established by the current administration - the structural fiscal deficit will reach 1% of GDP.

According to the Minister, "the fiscal policy of this Government aims to contribute to economic growth, the creation of quality jobs, macroeconomic stability and the general development of the country”.

The authority explained that the fiscal consolidation path seeks to generate "the necessary conditions to achieve the government program’s objectives, geared towards giving greater opportunities, justice, and freedom for Chileans".

Also, the decree signed by Minister Larraín and President Piñera states that "fiscal policy should be focused on the responsible management of public debt and investment of public financial assets, to recover levels of sovereign risk and low credit cost, ensuring an adequate tax burden, and the efficient and transparent use of public resources”.

The Minister added that the government program aims to gradually reduce the structural deficit. "This is important because in this way we guarantee that we will not affect social benefits or the commitments we have acquired”, he said.

The Minister of Finance stressed that the implementation of the fiscal policy based on the structural balance will allow the country to strengthen the financial position of the public sector during the current administration, maintain the level of available financial assets, necessary to face future fiscal commitments, and decrease the rate of growth of public debt. "This aims to recover not only the sustainability of our fiscal accounts, but also the sovereign risk rating notch we lost last year”, said Minister Larraín, adding that today he will contact the risk rating agencies to report the details of the decree of fiscal commitment.

The authority emphasized the necessity to be "realistic", and that recovering the sovereign risk rating may take around three to four years.

The decree that establishes the fiscal policy of the Government is available at www.dipres.cl 

 

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