MercoPress. South Atlantic News Agency

Record budget surplus in Chile this year: 8.1% of GDP

Because of high copper prices, Chilean treasury officials now believe that they will end the year with a historic budget surplus of 8.1% of the Gross Domestic Product (GDP).

The surplus will total 13.08 billion US dollars, the highest on record and almost double the sum predicted earlier this year. The new balance is also larger than the Finance Ministry's predictions last July, which foresaw a 7.1% budget surplus in 2007. According to budget director Alberto Arenas, the surplus increase is due to additional copper revenues, which have risen sharply during the second half of this year. Arenas said that the surplus would enable the Chilean Treasury to increase its financing activities, but that part of it would also be used to reduce the central government's debt. In 2006, the debt was 5.6% of GDP, and this year it went down to 4.9%. In 2008, it will fall to 4.1%, "a new historical low," Arenas said. Last Wednesday Arenas presented the Public Finance Report to Congress. He said that this year's fiscal income would reach 48.83 billion US dollars, 17% higher than the Treasury's current estimate. But it anticipates a 6.8% drop in 2008, to 41.29 billion. He added that the net income in 2007, --including the private mining industry--, would total 30.1 billion US dollars, 12.5% more than predicted. In 2008, it will rise to 30.59 billion US dollars. Codelco (Chile's main copper corporation) will pay 7.68 billion US dollars to the Treasury in 2007, 50.5% more than estimated this year. However, in 2008, they will pay 35.7%, or 5.11 billion US dollars. The Santiago Times