Chile’s President José Antonio Kast unveiled his administration’s first budget proposal, increasing spending by 1.5% in 2027 with a strong focus on employment as concerns over the weak economy mount. The government is allocating 9.5 trillion pesos ($9.8 billion) to support growth and job creation, an 8.1% increase from this year, Kast said in a televised address late Wednesday. Security, another centerpiece of his campaign, will also be a priority in next year’s budget, with spending in the area set to rise 9.1%.
Kast took office in March pledging to revive Chile’s economy through corporate tax cuts, job creation and stronger investment while reining in government spending. But the economy contracted in the first quarter and stagnated in the second, bringing it close to a technical recession and raising questions about how aggressively the administration can cut spending without further weakening activity. The economy has emerged as a growing source of voter discontent. In a Cadem poll published Sept. 13, 79% of respondents said the government should devote greater attention to growth and employment, well above the 33% who cited security, crime and drug trafficking.
The budget announcement also comes days after the administration announced plans to allocate 1.3 trillion pesos to a plan aimed at spurring job creation as Chile grapples with its highest unemployment rate in five years. To advance another campaign pledge, funding for the migration services office will increase by a third to support the deportation of irregular migrants. Meanwhile, the health budget will grow 4.7%. The 2027 proposal follows years of spending increases that still left the previous administration struggling to meet its fiscal targets. Kast’s budget proposal will now head to Congress, where lawmakers can modify spending allocations before approving the legislation.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing