Kast Government Admits Chile Won't Meet Fiscal Balance Promise

The government of President José Antonio Kast has conceded that Chile will fall short of its campaign promise to achieve fiscal balance, now projecting a deficit of 1.5% of the GDP by the end of its term in 2030. This marks a significant revision from earlier fiscal targets.

Finance Minister Jorge Quiroz stated that the deficit would be reduced progressively over the coming years. He noted that while the administration anticipated fiscal complexities, the magnitude of the challenges encountered was greater than expected. Chile concluded 2025 with a deficit of 3.6%, a figure Kast's government attributes to the preceding administration's failure to meet its deficit goals for three consecutive years.

Another key fiscal objective is to keep public debt below 45% of GDP, a level it stood at 41.5% at the close of 2025. Early in its term, Kast's government implemented spending cuts across ministries and drastically adjusted a fund designed to cushion fuel price volatility, which had surged by up to 60%. Concurrently, a major economic reform package has been presented to Congress.

The centerpiece of this reform is a gradual reduction of the corporate income tax rate, from the current 27% down to 23%, aligning it with the average in developed nations. President Kast aims for unemployment to decrease to 6.5% and for the economy to achieve an average annual growth rate of around 4% by 2030, a notable increase from last year's 2.5% growth.

“

We always imagined that (the situation) could be something more complex, but not in the magnitude that we found it.