Santiago — Chile is gambling its status as a pro-market poster child as the government scraps plans to cut debt in favour of at least $1.5bn a year in additional social spending to appease protesters.

With violent demonstrations entering their second month, officials are now planning a wider fiscal deficit target in 2020 that could grow even larger in coming years as citizens demand more generous wages and pensions, as well as a new constitution. That move may fan further increases in public debt that’s already risen to 26% of GDP from 5.2% in 2008...

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