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Brazil & Southern Cone - July 2018 (ISSN 1741-4431)

Economic Highlights

Fiscal deficit target: On 6 June Chile’s Finance Minister Felipe Larraín announced that the right-of-centre Chile Vamos coalition government led by President Sebastián Piñera will commit to lowering the structural fiscal deficit by 0.2% of GDP per year which will reduce it from its current 2% of GDP to 1% of GDP by 2022. The previous government led by former president Michelle Bachelet (2014-2018) had failed to meet its structural fiscal deficit target of 1.7% of GDP in 2017 which instead amounted to an unexpected 2.1%. The statement by the Piñera government regarding its fiscal commitments emphasised that fiscal policy must be focused on responsible management of public debt, among other factors. Larraín in the press conference added that the reduction of the deficit, through austerity measures and budget reallocations, would be achieved gradually so that it would not affect social benefits or other commitments made by the government.

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