The 2017 Budget and Country Risk

A Challenge for Growth

Abstract

The debate over the spending increase in the 2017 public budget has already been settled and, broadly speaking, has left most actors in the political and economic-financial spheres satisfied. Fears of excessive pressure from higher public sector spending that could affect investment and the rest of the world's perception of Chile's fiscal accounts seem to have vanished. So have fears of a rise in country risk. And that is what is worrying. Not for the reasons put forward by many analysts in the days before the Minister of Finance's announcement of the forecasts for next year, but because there appears to be a mistaken view of the problems facing the Chilean economy in the long run. Continue reading...