MercoPress. South Atlantic News Agency

Outgoing Piñera announces a 2014 tight budget for the next government

The budget is conservative Piñera’s last

The Chilean government plans to raise spending 3.9% next year, the second-smallest increase since 2003 and below the central bank’s forecast for economic growth in 2014. The budget will focus on employment, education, crime, poverty, children, pensioners and infrastructure, President Sebastian Piñera said in a televised address without giving details.

The increase in spending compares with the 5.9% programmed for this year and 4.7% in 2012, according to the Budget Office. The budget, Piñera’s last as president, follows two years of student protests for cheaper public schooling and comes less than two months before presidential elections. Piñera stressed that he would leave office with the economy in better shape than when he assumed power four years earlier.

“We received an economy that grew little, created few jobs and had a high fiscal deficit,” the president said. “Today it has recovered its dynamism and it has duplicated its capacity to grow and create jobs.”

Economic expansion has exceeded 4% in all but one of the past 13 quarters.

Piñera, who is barred by law from running for a second straight term, reiterated plans to shrink the structural deficit to 1% of GDP from 3.1% when he took office. The structural deficit adjusts revenue for cyclical swings in commodity prices.

“The incoming government will have a healthy and solid fiscal, macroeconomic and savings situation,” Piñera said.

The president is supporting the candidacy of ruling coalition candidate Evelyn Matthei, who will face off against former President Michelle Bachelet in November.