Public spending fell 21% in Chile between January and September

The Budget Directorate (Dipres) in Chile delivered a new quarterly report on the execution of public spending, this time for the period January-September of this year, showing that the strong adjustment in fiscal accounts continues, normalizing after two extraordinary years as a result of the pandemic.

Thus, the total expenditure made by the Central Government contracted by 21.1% so far this year, representing 17.5% of the Gross Domestic Product (GDP) for the year. This compares to an increase of 30.2% accumulated in the same period of 2021 when compared to 2020.

As explained by the director of Dipres, Javiera Martínez, at a press conference, the result is due to the annual drop in current spending (disbursements for the operation of the public sector), of a real 23%, and in capital spending (which considers transfers of resources and state investment), of 2.7% real, highlighting the lower expenditure executed in subsidies and donations compared to the same period of the previous year (41.1% real), together with the annual fall in investment spending (27.5% real) .

In detail, subsidies and donations registered a decrease of 54% per year due to a higher basis of comparison, considering the higher expenses of 2021 associated with the Universal Emergency Family Income (IFE), Middle Class Bonus, Tax Charge Bonus for AFP Affiliates and other support subsidies for the pandemic, “which is not compensated by the increased spending in 2022 for the benefits of the Employment Subsidy, nor by the increased spending for the beneficiaries of the implementation of the Universal Guaranteed Pension”.