NEW YORK: Chile’s government is readying legislation to unlock billions of US dollars of investments by speeding up the approval process, following years of complaints over excessive red tape, Finance Minister Mario Marcel says.
The government will introduce a bill overhauling environmental impact assessments to accelerate the evaluation of decarbonisation projects worth more than US$7.5bil, Marcel told investors at the annual Chile Day event in New York last Friday.
The administration will also expedite more than 100 other investment proposals.
Overall, Marcel identified six sectors that are most promising due to Chile’s comparative advantages: mining, lithium, renewable energy, green hydrogen, the digital economy and tourism.
“There’s interest in investing in Chile, not only from those who have already been producing and investing there for many years but also from new entrants, people who want to enter new industries,” Marcel said in a subsequent interview.
“That’s what’s going to give Chile a greater capacity to boost its economy.”
Marcel expects Chile’s gross domestic product (GDP) to expand about 2.5% this year, boosted by a rebound in investment.
Furthermore, inflation will return to target early next year for the first time since 2021, he said.
Still, critics point to lengthy investment bottlenecks, as well as higher public debt and weaker economic growth compared with prior administrations, which have combined to damage Chile’s reputation as an emerging market favourite.
Election Year Chile’s benchmark stock index rallied to a record this month, partly on expectations that elections later this year will usher in a more market-friendly administration.
A Cadem poll published yesterday showed right-wing candidates Evelyn Matthei and Jose Antonio Kast leading voting intentions, followed by former Interior Minister Carolina Toha, who is the best-placed contender on the centre-left.
Local election laws forbid President Gabriel Boric from running for a second consecutive term.
In other news, the Treasury has already completed roughly 45% of its bond sale plans for this year, Marcel said.
For the remaining sales, about 70% will be in the local market and 30% abroad, he added.
“Our idea is to move as quickly as possible to reduce uncertainty regarding developments in the financial markets that may occur later in the year,” said Marcel, a University of Cambridge-trained economist.
US Talks Top priorities before Boric’s term ends next March also include the consolidation of fiscal accounts and negotiations with the US government on trade and tariffs, he said.
Marcel, who previously served as central bank governor and director of the government’s budget office, said he will remain finance minister “as long as the president needs me”.
Chile’s GDP expanded by 0.7% in the first quarter from the prior three-month period, more than all estimates in a Bloomberg survey.
Activity was boosted by both private and government consumption, as well as exports. Still, that reading was for the period before US President Donald Trump slapped 10% tariffs on key Chilean shipments, including fruit and fish.
As of now, the world’s largest economy hasn’t applied levies to copper, Chile’s top export. — Bloomberg
