Objective: to end the social crisis in Chile. Finance Minister Ignacio Briones announced Monday (December 2nd) a plan to support the economy by $ 5.5 billion. On the agenda, an increase in public spending in 2020 of some $ 3 billion, financial assistance of $ 1.9 billion to small and medium-sized enterprises and $ 525 million of various measures, such as the reconstruction of the metro of the capital Santiago , very damaged since the beginning of the crisis.

This plan is expected to create 100,000 additional jobs, according to the minister, and lead to a 9.8% increase in public spending in 2020 compared to 2019. The budget deficit, meanwhile, could reach 4.4% of GDP .

"Like any Chilean household facing a difficult and unforeseen situation, we will use our savings and our borrowing capacity, knowing that these two elements have limits not to exceed," explained Ignacio Briones, stressing that these measures were made possible by the "previous years of budgetary responsibility of all governments".

Fall of activity

The announcement came the same day that the Chilean Central Bank announced a sharp decline of 3.4% of the country's economic activity, the worst performance since that recorded in 2009 (-3.5%), at the height of the international financial crisis. This drop in activity is attributable in particular to the near-paralysis of businesses and services since the beginning of the crisis, according to the monetary institute.

This sharp contraction has led the authorities to downgrade their GDP growth estimates for 2019 to 1.4% from 2.5%, and to 2020, where it should be between 1% and 1.5%. "The crisis has caused a very sharp deceleration of growth and the fourth quarter should be in the red.The unemployment rate should start rising again and the banks began to limit credit," said AFP. economist Francisco Castañeda.

The Central Bank of Chile announced in late November the injection of $ 20 billion into the economy, to curb the plummet of the peso, impacted by the crisis.

The social crisis that began on 18 October is the worst since the end of the dictatorship of General Augusto Pinochet (1973-1990). After 46 days of demonstrations against the inequalities in this prosperous country, the movement left 23 dead, including five after the intervention of the police, and more than 2,000 wounded.

With AFP