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Chile’s Pinera offers new stimulus spending, warns against populism

imageEconomy19 hours ago (Jul 31, 2020 11:50PM ET)

(C) Reuters.

SANTIAGO (Reuters) – Chile’s President Sebastian Pinera announced $4.5 billion in additional stimulus spending to help soften the blow of the pandemic and warned against a drift toward populism as people take advantage of a new rule allowing them to dip into their pension funds.

In an address to lawmakers, Pinera said public investment in 2020-2022 will reach $34 billion, of which $4.5 billion had not previously been announced. The center-right leader warned against populist solutions to Chile’s economic woes, which include huge inequalities and a recession worsened by the impact of COVID-19.

“The entire world is being threatened by populism, which always offers the easy path of rights without duties, of achievements without effort,” he said, warning against “promises of easy solutions to difficult problems.”

More than 3 million Chileans on Thursday asked to withdraw some of their pension funds as a law took effect allowing citizens to tap into retirement savings.

Pinera’s government opposed the emergency measure. It has also warned about the longer-term impact on the profitability and already low average payouts of pensions.

Despite those pleas, opinion polls indicate nearly nine out of every 10 Chileans planned to tap their funds. Most said they would use the money to pay for basic goods and services.

“The effect that the coronavirus and the global recession have had on our economy and Chilean families has been devastating,” the president said.

Chile’s Pinera offers new stimulus spending, warns against populism

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