Economic Recovery Will Drive Narrower Fiscal Deficit In Chile

• Chile’s government revenues will experience a sharp increase in 2021 on the strength of rebounding economic activity, narrowing the fiscal deficit.
• However, Fitch Solutions expects the pace of fiscal consolidation will be slow, as expenditures will remain elevated as the government attempts to support economic activity.
• It has revised its 2021 fiscal deficit forecast to 4.5% of GDP, from 5.8% previously and 7.3% in 2020, due to revenues inflows rebounding more strongly than previously expected in Q4 2020 and its brighter outlook for real GDP growth in 2021.

(Source: Fitch Solutions)