Chile’s government reached a deal with opposition lawmakers for a US$ 12 billion stimulus package over the weekend as infections hit a record and the health minister quit.
The new measures will boost income for poor families and the unemployed, subsidize job creation and cut taxes for small and medium-sized companies, the government said.
The program will be financed through new debt, the drawing down of savings in the country’s sovereign wealth funds as well as the reallocation of budget spending.
“The plan is very powerful and allows us to be optimistic about overcoming the crisis,” Finance Minister Ignacio Briones said in a press conference. “It also allows us to create a responsible fiscal framework for the medium term.”
Even before the latest measures, the government of President Sebastian Piñera had announced stimulus measures worth about US$ 17 billion, equivalent to about 7% of gross domestic product, to fight the crisis. Chilean economists expect the economy to contract 4.8% this year, according to the latest Central Bank survey, which would be the deepest slump in nearly four decades.
Health Minister Jaime Mañalich resigned on Saturday as Chile’s coronavirus outbreak continued to get worse. The Health Ministry reported a record 5,013 new cases on Tuesday and total 184,449 contagions with a total 3,383 deaths. Chile has more coronavirus cases per capita than any country except Qatar and Bahrain. Because of accountancy problems, another 31,412 cases will be added in the coming days.