Chile: Slow fiscal execution creates a risk that projections for public spending over the year will not be met

During the first eight months of the year, the rate of execution of fiscal expenditures has not differed significantly from the same period in 2013. Expenditure in public-sector investment fell again in August, and is contributing to the severe reduction in total investment so far this year. Thus, in order to meet the Ministry of Finance’s target for 2014, spending will have to grow by an annual real average of 10% in the last four months, putting a 2% floor on GDP growth. Finally, meeting these targets will also put pressure on the CLP to appreciate.

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