Chile’s 2025 Fiscal Spending to Rise 2.7%, Focus on Security
(Bloomberg) -- Chile President Gabriel Boric unveiled the 2025 budget proposal with a 2.7% increase in spending and a strong focus on fighting crime, a topic that represents voters’ top concern heading into an election year.
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The administration will boost security at international border crossings and increase expenditures to combat organized crime within jails, Boric said in a televised speech late on Sunday. Roughly 1,300 new police officers will be deployed nationwide, bankrolled by new funds from recently approved legislation against tax evasion, he said.
The modest spending plans will cut Chile’s “structural” budget deficit to 1.1% of gross domestic product next year, Finance Minister Mario Marcel said in a interview with Radio ADN on Monday. The shortfall will narrow from an estimated 1.9% of GDP this year, allowing public debt as a percentage of GDP to stabilize after increasing for 17 years, Marcel added.
Other priorities outlined on Sunday by Boric include a reduction in waiting lists for the nation’s healthcare facilities, fulfilling the government’s pledge of constructing 260,000 new housing units and also spending more on culture. The budget proposal will now be submitted to Congress for approval.
The spending plans will “consolidate progress in public security, as well as economic and social security, and we will have new resources to go further,” Boric said.
The announcement comes days after lawmakers approved legislation that clamps down on tax evasion and combats informality in the economy. The measures will raise an extra $1.2 billion next year, or about 0.4% of GDP, Marcel said Wednesday. But some economists have expressed skepticism over the estimates, saying they are unrealistically high.
The new tax evasion bill will gradually increase government revenue, Marcel said during the radio interview Monday, and that incremental increase is taken into account in next year’s budget.
While Chilean laws prevent him from serving two consecutive terms, Boric has little room for maneuver ahead of 2025 elections. His personal approval rating stands at just 35%, while 58% disapprove of his management, according to a Cadem poll published this month. The survey identified reforms related to security and addressing crime as the most important for the future of the country.
(Updates with comments from Marcel starting in the third paragraph.)
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