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The Budget Office (Dipres) cut growth projections from 2022 onwards, and stressed the importance of reduce public debt in the medium term.
The Ministry of Finance reported that it identified almost 2.3 billion dollars in inefficient state programs and administrative expenditures, which will reinforce priority social initiatives.
Details
As the Minister of Finance announced yesterday, Ignacio Briones, Dipres presented the Public Finance Report for the third quarter to Congress, confirming a weakening of growth projections from 2022 onwards.
Yesterday we learned that the estimate of economic contraction in 2020 was cushioned, which went from 6.5 to 5.5%. For the following years, however, the downward growth.
In 2021 we would grow 5% and not 5.5%, in 2022 it is corrected from 3.5 to 3.3 points, in 2023 the fall is from 3.5 to 2.9% while in 2024 the correction is 3 , 5 to 2.8%.
The outlook is on the downside and this is also reflected in the Treasury debt, which this year will increase spending by 11.4% maintaining that fiscal momentum for next year.
And this also has a correlation in gross debt, which in June of this year was already around 30% of Gross Domestic Product, and next year it would amount to 35.6%. With that trajectory, it is expected to reach its highest level in 2024, with 44.6% of GDP, to then begin a slight fall.
The Director of Budgets, Matías Acevedo, warned the opposition that maintaining this trend will be essential and if this fiscal impulse is not considered until 2022 as transitory, the debt could reach 70% of GDP by 2025, paying $ 6 billion in interest alone.
Regarding the design of the Budget, much was discussed regarding the austerity evaluation made by the Ministry of Finance. Minister Briones gave part of the details of this exercise, which had three axes: ask public agencies to prioritize their allocations, reduce administrative expenses and review state programs.
687 programs were reviewed where, along with unnecessary expenses, $ 2.27 billion were identified that could be reallocated to items and programs considered priority. How was this done? Minister Briones specified that the general exercise was review all programs and see which ones were aimed at the same goal, in order to be able to join them together.
What will happen with those funds: a 75% of them will go to programs that are a priority for the ExecutiveAmong them, the solidarity pension system, improvement of housing and neighborhoods, the Guaranteed Minimum Income, the rural drinking water system, the financing of university fees and the reduction in the transport rate for the elderly.
The other 25% will go directly to creating five special funds: one for the acquisition of vaccines against covid-19, one to solve waiting lists, one for mental health, one special for culture and one for SMEs with an emphasis on tourism and innovation.
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