Chile’s newly-inaugurated President Boric is inheriting a slowing economy which is likely to slip into a recession this year. But his government will still have to push through significant fiscal tightening to repair the public finances and alleviate growing balance of payments risks. This will probably be politically difficult to achieve for a sustained period. So we doubt that austerity will go far enough to prevent the public debt-to-GDP ratio from rising during his tenure.
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