A look ahead to Chile’s election

The frontrunners in Sunday’s presidential election in Chile, Gabriel Boric and José Antonio Kast, hold different views on the desired size of the state in the economy, but both advocate relatively loose fiscal policy. This would help to support economic growth in the near term but could raise concerns about inflation and public debt in the medium term. Alongside lingering uncertainty over the new constitution, these factors are likely to keep Chilean financial markets on the backfoot in the coming quarters.