Kast Government Admits Chile Will Not Achieve Promised Fiscal Balance

Chile's government, led by far-right President José Antonio Kast, has conceded that it will not meet its promise of fiscal balance. The administration now projects ending its term with a deficit equivalent to 1.5% of the Gross Domestic Product (GDP). This represents a significant departure from Kast's initial campaign pledge to curb spending and balance the nation's books.

Finance Minister Jorge Quiroz announced the revised fiscal policy, stating the deficit would be progressively reduced from the current 3.6% of GDP to the projected 1.5% by 2030. This adjustment comes amid a noticeable decline in Kast's popularity. A recent Cadem poll indicated his approval rating dropped from 57% to 43% in just three months. During this period, the government reduced ministerial spending and made drastic adjustments to a fuel price stabilization fund, which subsequently led to increased fuel prices and a higher cost of living.

According to a Criteria survey, one-third of Chileans anticipate the economy will worsen in the coming months. The Kast administration attributes the "complex situation" to the policies of former leftist President Gabriel Boric, citing his failure to meet deficit targets for three consecutive years. "We always imagined that (the situation) could be somewhat more complex, but not to the magnitude we found it," Quiroz told reporters.

Meanwhile, the government is also engaged in discussions with Congress regarding a major economic reform package. The proposed measures aim to stimulate growth through a gradual reduction in corporate income tax. The administration's objective is to achieve an annual economic growth rate of approximately 4% by the end of Kast's term, a significant increase from the 2.5% recorded last year.