Marcel promises to reduce economic uncertainty in Chile

Chile’s incoming Finance Minister Mario Marcel has pledged to reduce economic uncertainty and seek to control debt levels, as he prepares to take the reins of the economy next month as part of the new administration of the president-elect. , Gabriel Boric.

Establishing a tax base that allows the new government to execute its plans will be a priority, he said. Marcel this Tuesday to journalists in Santiago after meeting with the outgoing Minister of Finance, Rodrigo Cerda. Employment has recovered more slowly than economic activity and creating more jobs is an issue that needs to be addressed, he said after a transition team meeting that lasted more than two hours.

Marcel will be in charge of boosting an economy that remained strong earlier this year after posting record growth of nearly 12% in 2021.

At the same time, voracious consumption and higher commodity costs have pushed inflation well above target. That, along with political volatility, has introduced a degree of uncertainty unusual for one of the world’s most stable emerging markets.

In the future, Marcel will be in charge of a tax reform that Boric describes as a main focus of his Government.

surprise decision

Marcel He said that his team had been taken by surprise by the announcement that the Administration of outgoing President Sebastián Piñera had extended a labor subsidy program. He asked Cerda to avoid making last-minute decisions involving public funds, or to give him advance notice before making such moves.

In the coming weeks, the incoming finance minister’s team will review the legislative agenda in more detail, Marcel also told reporters. Proposals that include cutting hours in the workweek are central to Boric’s plans, and details about how gradually the changes will be implemented have yet to be ironed out, he said.

Furthermore, he reiterated that borik will not support any proposal for new pension fund withdrawals after previous bills caused an outflow of some $50 billion from savings funds during the pandemic.

The appointment of Marcel last month was applauded by investors who saw the decision as a sign of political restraint and fiscal prudence in the leftist coalition led by borik. In his previous role as central bank chief, he won praise for helping steer Chile’s economy through the pandemic and also for criticizing early pension withdrawals.

The current Piñera administration will have to nominate a new central bank director after a board seat was emptied with the nomination of Marcel to the Boric government, the incoming minister said.