Chile obliged to loosen the purse strings as protests continue
Plans to cut debt are scrapped in favour of at least $1.5bn a year in extra social spending, maintaining its reputation for fiscal prudence in Latin America
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...