MercoPress. South Atlantic News Agency

President Kast denounces 3.6%-of-GDP structural fiscal deficit inherited from Boric administration

“We inherited a country with the accounts in disarray, and our obligation is not to complain, but to order them,” Kast said in the legislative chamber

Chilean President José Antonio Kast on Monday delivered his first annual Cuenta Pública address before the National Congress, based in Valparaíso, in a speech of two hours and twenty-five minutes centred on the country's fiscal situation and on criticisms of the outgoing administration of leftist Gabriel Boric (2022-2026). The president denounced that the incoming executive received a preliminary structural fiscal deficit of 3.6% of Gross Domestic Product, more than double the 1.6% committed to by the previous government, and characterized the situation as an “economic emergency” requiring urgent measures.

“We inherited a country with the accounts in disarray, and our obligation is not to complain, but to order them,” Kast said in the legislative chamber, without directly naming the previous administration. The president argued that the state's revenues in 2025 closed almost two points of GDP below budget, attributable to “a revenue projection made with an optimism that did not adjust to reality.” The speech followed the publication, a week ago, of the Public Finance Report for the first quarter of 2026, prepared by the Budget Directorate of the incoming government. Finance Minister Jorge Quiroz denounced that the equivalent report released at the end of 2025 by the Boric administration contained “errors” and “inconsistencies” in the projection of gross public debt for the 2026-2030 period, allegedly underestimated by some USD 10.5 billion. Lawmakers from the Republican Party —founded by Kast— and from the Libertarios, led by Johannes Kaiser, consequently announced a constitutional accusation against former Finance Minister Nicolás Grau.

The macroeconomic picture presented by the president includes recent data delineating the most adverse scenario in recent years. Chilean economic activity contracted by 1.2% in April compared to the same month in 2025, the largest drop in three years. The national unemployment rate reached 9.1% in the February-April quarter, the highest level since June 2021, in the midst of the pandemic. Female unemployment stands at 10.5%, and the general indicator has remained above 8% for forty consecutive months. “The latest growth and unemployment indicators are very negative. They represent the starting point of our administration and force us to react urgently,” Kast said.

The president defended the cuts implemented during his first 82 days at La Moneda, described as “measures of containment and efficiency of public spending” that have generated savings of more than 1.3 trillion Chilean pesos, equivalent to around USD 1.46 billion. The initiative is part of his campaign commitment to a USD 6 billion fiscal adjustment over eighteen months. The president reaffirmed his goals of 4% annual growth, a reduction in unemployment to 6%, and the recovery of at least 300,000 jobs. He also requested the Congress to back the so-called tax megareform, whose processing will begin on Tuesday in the Senate.