Latin America Advisor

Latin America Advisor

A Publication of The Dialogue

Will Boric’s New Social Plan Lessen Tensions in Chile?

Chilean President Gabriel Boric’s government recently announced a new $2 billion social-spending package. // File Photo: Chilean Government.

Chile’s government on Jan. 5 announced a new $2 billion social-spending package that includes doubling the budget of an annual cash-transfer program for the poor and middle class, a new payment to help families to buy food, an expansion of a school lunch program, discounts on medicine and government guarantees for loans to the construction industry. What will be the economic impact of the program, and is the money well-targeted? How much could the program lift President Gabriel Boric’s sagging approval ratings? How well is Boric’s government managing the economy in general, and what are the main obstacles it faces?

Sergio Urzúa, professor at the University of Maryland and international research fellow at Clapes UC: “It is hard to pinpoint exactly when, but Chile fell into the middle-income trap sometime in the last decade. The 2019 riots and the Covid-19 pandemic kept the ruling class under a veil of ignorance, even a state of denial, regarding the nation’s new standing. Then, record inflation (12.8 percent, the highest since 1991), a rising public debt (25 percent of GDP in 2018, now approaching 40 percent), a large current account deficit (around 10 percent of GDP in 2022) and a darkening economic outlook sounded the alarms. On top of that, the 2022 constitutional fiasco and the erratic behavior of the Boric administration around sensitive issues (such as ratification of the Trans-Pacific Partnership and controlling violence) have raised public awareness of Chile’s economic challenges and, not surprisingly, took Mr. Boric’s approval ratings down from 50 percent to 25 percent in less than a year. And 2023 seems bleak. Until now,…”

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The Inter-American Dialogue publishes the Latin America Advisor every business day for a distinguished membership of informed corporate leaders, scholars, and government officials invested in Latin America’s development and future. The Advisor‘s highly regarded Q&A section covers questions submitted by subscribers themselves. Commentators regularly include heads of state, business leaders, diplomats, economists, analysts, and thought leaders from around the world. Many of the world’s largest and fastest-growing companies subscribe to the Advisor. To subscribe click here or for more information, contact Erik Brand, publisher of the Advisor, at

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