Chile: Selected Issues
Author:
International Monetary Fund
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Publication Date:
09 Sep 2009
eISBN:
9781451807707
Language:
English
Keywords:
ISCR; CR; Chile; productivity slowdown; EDF; spending pressure; potential GDP; spending path; spending ceiling; fund staff; Global
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This Selected Issues paper for Chile assesses the impact of the global financial crisis on Chilean banks. It provides a framework for analyzing government measures aimed at reducing systemic risk. The analysis suggests that Chilean banks are resilient to global and regional shocks. However, even in the absence of direct exposures with other countries in the region, there may be risk spillovers from other banks in the region and in advanced economies. The paper also presents options for further strengthening Chile’s fiscal framework.

Abstract

This Selected Issues paper for Chile assesses the impact of the global financial crisis on Chilean banks. It provides a framework for analyzing government measures aimed at reducing systemic risk. The analysis suggests that Chilean banks are resilient to global and regional shocks. However, even in the absence of direct exposures with other countries in the region, there may be risk spillovers from other banks in the region and in advanced economies. The paper also presents options for further strengthening Chile’s fiscal framework.

II. A Longer-Term Approach to Fiscal Policy in Chile1

1. Fiscal policy in Chile has been designed, since 2001, around the structural balance rule. The structural rule (SBR) has aimed at generating a central government structural surplus of 1 percent of GDP per year until the 2008 budget, when it was changed to 0.5 percent, and temporarily to balance in January 2009. The objective of such a rule is to design fiscal policy within a medium-term perspective that isolates revenues from its cyclical factors due to business cycle and copper price fluctuations.

2. The original target for the structural rule was established on the basis of, mainly, three important fiscal risks facing Chile.2 One was related to the contingent liabilities of the central government, particularly related to social pensions and minimum pension guarantees; another was the negative net worth of the Central Bank of Chile (BCCh), and also the external vulnerabilities due to lack of domestic currency borrowing. As noted by Engel, Marcel and Meller (2007), these risks have diminished since the structural rule adoption, and the surplus target was, therefore, reduced to ½ percent of GDP in 2008.

3. A Fiscal Responsibility Law (FRL) was enacted in 2006 that further strengthened the fiscal policy framework. The FRL formalized several aspects of the fiscal framework that were previously voluntarily adopted by the government, but still kept the SBR out of the legal framework. In particular, although the law does not bind governments to a specific structural target, it forces to analyze fiscal policy and present budget documents in the framework of the structural surplus balance, discussing the effects of these policies on the structural surplus, within a 2-3 year policy horizon that is recalibrated annually. It also regulates the management of the flows of fiscal surpluses (or deficits) with the creation of two funds, the Economic and Social Stabilization Fund (FEES) and Reserve Pension Fund (FRP).

4. This chapter presents options for further strengthening Chile’s fiscal framework. In particular, the paper looks at fiscal policy within a longer-term perspective, that could complement and enhance the current fiscal framework in Chile. The longer-term perspective incorporates trends associated with demographic and specific spending pressures in Chile, particularly in health, education and social protection, to assess its impact on public finances over the long-term. As these long term trends are essentially uncertain, the baseline fiscal projections are also complemented with a stochastic analysis that allows to underscore the risks inherent to any fiscal policy decision.

5. This approach follows to a large extent, those adopted by other advanced economies, such as Australia and Norway. In these economies, several reforms to their fiscal policy frameworks were precipitated by demographic and health care pressures over the medium term, and by how these pressures were expected to be translated into contingent fiscal liabilities and affect the sustainability of fiscal policy.

  • Australia. An intergenerational report is prepared every 5 years, beginning in 2002, to assess the long-term (over 40 years) sustainability of current policies. The 2007 report, builds on other relevant documents such us Australia’s Demographic Challenges (2004) and the research report from the Productivity Commission Economic Implications of an Aging Australia (2005). Although the baseline assumption in the report is that current policies are maintained in the future, broad policy choices to address the fiscal sustainability challenges are also discussed. Fiscal sustainability is defined as spending per capita relative to income per capita and their implications for net public debt.

  • Norway. Budget documents are complemented with an analysis of the Long-Term Perspectives for the Norwegian Economy. This report discusses long-term economic and social challenges, including their implications for future economic policy, including the challenges stemming from the expected decline in oil production and how its wealth can have lasting contributions to financing the budget. An emphasis is also placed on achieving sustainable development given “global environmental considerations, an ageing population, and increased globalization.” Projections are presented for up to 50 years with detailed discussion about productivity, and labor market trends, global economic factors, demographic trends, and expected long-term trends in public finances with, a discussion on potential policy options to face these challenges.

A. Long-Term Fiscal Policy

6. The current framework in Chile could be strengthened by incorporating more long-term considerations into short-term policy formulation. While the structural balance rule has reinforced Chile’s traditional prudent fiscal policy, it does not fully incorporate a longer-term analysis on likely spending and demographic pressures and their implications for public net assets. The current framework for fiscal policy has a 2-3 year policy horizon, which is recalibrated annually during the budget process. The paper attempts to take a step in bringing more of a long term to fiscal policy formulation, by analyzing long-term demographic and other Chile-specific spending pressures, with special focus on health, education, social protection and environmental spending. This analysis could help strengthen the link between spending per capita relative to income per capita, and its implications for the net public position of the government.

Assessing Long-Term per capita Public Spending based on the Structural Balance Rule

A baseline macroeconomic scenario for the next 40 years

  • The baseline macroeconomic scenario (Table 1) assumes that the SBR outcome for 2009 is set at -0.4 percent of GDP, as recently announced by the authorities, with the target returning to 0.5 percent of GDP over the medium-term.

  • The non-mining GDP deflator and non-mining real GDP growth are assumed to stabilize at 3 percent over the medium term. The growth of real mining GDP is assumed to have a negative trend towards zero after growing at more than 3 percent per year until 2020.

  • Copper prices are assumed to converge to the long-term equilibrium (assumed at 160 USc/lb in 2010) over the medium-term and then grow at around 2 percent per year.3

  • Population data is obtained from Chile’s National Statistical Agency (INE) and show a declining population growth rate. However, the number of people 65 years old or older is projected to increase significantly over the medium-term, but not enough to compensate the reduction in the population of younger ages.

  • Potential growth is based on the assumption of a long-term growth rate of total factor productivity twice that observed over the period since the SBR was introduced (2001–08).4 The capital stock is assumed to grow at similar rates to those recently observed; hours worked follows demographic trends, with a relatively constant participation rate.

Table 1.

Chile: Long-Term Macroeconomic Assumptions Under the Baseline Scenario

article image

Deflated using the non-mining GDP deflator.

7. Copper price projections play a critical role over long-term revenue trends. Over the next few years, copper prices are projected to be above its long-term level, resulting in a positive copper revenue gap (Figure 1). On the other hand, the negative output gap generated by the current crises is assumed to be eliminated only by 2014, resulting in negative non-mining tax revenue gaps. Since non-mining tax revenues are assumed to grow in line with GDP, the long-term evolution of total tax revenues (in percent of GDP) will depend on the difference between GDP growth and the growth of copper production and prices. Under the baseline scenario, copper revenues (the combination of its price and output) grow above GDP until around 2020, but slightly below subsequently. Thus, the share of tax revenues to GDP decline gradually over the medium- and long-term, to 20.8 percent by 2050, slightly above the average level over 2001–08, 20.4 percent of GDP.

Figure 1.
Figure 1.

Chile: Medium-Term Macroeconomic Dynamics

Citation: IMF Staff Country Reports 2009, 272; 10.5089/9781451807707.002.A002

Source: Fund staff estimates.

8. The baseline scenario suggests that the net position of the government remains relatively stable. In this scenario, spending is derived as a residual, in the sense that the spending ceiling is determined based on the assumptions on tax revenue and growth and the application of the SBR. Under the baseline scenario of unchanged tax policy and a return to an SBR target of 0.5 percent of GDP by 2012, the net position of the central government deteriorates moderately from its peak of 11.2 percent of GDP in 2008 to around 2.5 percent in 2012. Subsequently, with the economy returning to potential, the net position is steadily restored back to around 11 percent of GDP over the medium-term.

9. However, the FEES would shrink to zero and remain at that level until the capitalization needs of the FRP are satisfied by around 2045 (Figure 2). Under the FRL, the FRP should receive contributions equal, in steady state, to the surplus of 0.5 percent of GDP minus the interest accrued by the fund the previous year.5, 6 This scenario also assumes that $8 billion from the FEES will be used to finance the budget and the 2008 Bicentennial Fund would be fully capitalized in 2009, with $6 billion.7 Thus, under the assumption that half of financing needs are financed by the FEES from 2010 and the other half are covered by issuing inflation indexed and dollar denominated debt, the size of the FEES declines to zero in 2025 and remains at this level until 2046, when it starts to be recapitalized again. At the same time, and without receiving further capital injections, the FRP subsequently declines as a percent of GDP.

Figure 2.
Figure 2.

Chile: Assets and Liabilities of the Central Government

(SBR target of 0.5)

Citation: IMF Staff Country Reports 2009, 272; 10.5089/9781451807707.002.A002

Source: Fund staff estimates.

10. A permanent zero structural balance would imply a gradual deterioration in the net position of the government. If a zero structural balance target were to be maintained indefinitely, the capitalization requirements of the FRP would worsen the fiscal position in the long-run (Figure 3). The reason is that yearly contributions to the FRP would have to be financed by issuing debt, which will exponentially increase the liabilities of the government and the associated interest payments. The net asset position of the central government would deteriorate slowly and turn into debtor status after 2050, with FEES assets declining to zero by 2019.

Figure 3.
Figure 3.

Chile: Assets and Liabilities of the Central Government

(SBR target of zero)

Citation: IMF Staff Country Reports 2009, 272; 10.5089/9781451807707.002.A002

Source: Fund staff estimates.

11. The capitalization requirements of the FRP suggest a structural balance target of no less than around 0.2 percent of GDP. The requirement under the FRL of minimum contributions to the FRP of 0.2 percent of GDP would require a structural surplus target of approximately 0.2 percent of GDP or higher, to ensure a non-negative path for the net position of the central government. This is particularly true over the medium-term when, even if returns under the FRP are capitalized, they would not be enough to reach legal capitalization requirements. Furthermore, any surplus in excess of 0.2 percent of GDP would be consistent with the need to face contingent liabilities other than those related to pension spending.

An “exogenous” look at per capita public spending

12. The SBR results in an expenditure path that serves to frame a more detailed discussion on expenditures by categories and their potential long-term trends. In a way, the analysis under the structural fiscal rule treats expenditures as a residual. However, this path may not be consistent with reasonable projections about spending based on demographics and other Chile-specific spending pressures.

Some Stylized Facts on Public Spending

13. A look at past trends in public expenditure reveals an important decline relative to GDP. Over the period 1998-2007, central government spending declined by more than 3 percentage points of GDP, from above 22 percent of GDP in 1999 to below 19 percent by 2007. This trend is generally observed across most spending categories, except for health spending that remains relatively stable at around 3 percent of GDP. Notably, whereas the share of the different spending categories to total spending is relatively stable over this period, spending on social protection falls from 36 percent to 31 percent of total spending. Half of that space is taken up by health spending that increases from 13 to 16 percent of total spending over the same period. A similar pattern is observed if we focus on real per capita spending growth.8 The average growth rate of total expenditure over the period was 4 percent with health increasing by 6.6 percent and education and social protection for old age by 4.8 and 1.5 percent respectively.

14. Comparing with other advanced economies, Chile’s public per capita spending is relatively low. This reflects to a large extent, a smaller general government in Chile, as the average size of the general government in OECD countries was equivalent to 43 percent of GDP, twice the size of Chile’s.9 Among the OECD, México is the only economy with a smaller public sector than Chile. It is important to bear in mind that different government sizes do not fully translate into different levels of provision of public services. Countries with pay-as-you-go pension systems tend to channel significant contributions and pension payments through the budget. This would not happen if the pension system is fully or partially capitalized and in the hands of the private sector, as in Chile. A similar trend is observed when comparing trends in real PPP per capita spending among OECD economies.

A Closer look at the Composition of Public per capita Spending

Chile long-term spending and demographic pressures (Exogenous Spending scenario)

15. This scenario assumes the baseline macro-framework presented before and makes assumptions about each spending component in Chile’s budget (Table 2). Long-term projections for some spending categories, such as defense, public order, economic affairs, and sports, are assumed to be constant in percent of GDP—at the average level of 1998–2007. The path for the other categories is based on more specific assumptions about the growth of real per capita spending. This generally reflects demographic trends, whenever spending can be clearly linked to some specific demographic group of the population, like primary, secondary and higher education. In other cases, the assumption for spending growth is based on existing official projections, such as those for the 2008 pension reform, presented by Arenas de Mesa (2008).

Table 2.

Medium- and Long-Term Expenditure Assumptions

article image

16. This scenario would suggest a marked deceleration in public per capita spending. Although total spending as percent of GDP increases significantly, average growth in per capita spending in real terms, which was 4 percent over the period 1998–2007 in Chile, would average 2.8 percent over 2010–2050. Lower projected growth rates are obtained for every expenditure component, with the exception of social protection for old age, with its per capita spending growth rate rising from 1.5 percent to 3.4 percent, due to the pension reform of 2008.

17. The expenditure envelope in this scenario exceeds the ones derived under the SBR with targets of 0.5 and 0 percent of GDP, respectively. Spending pressures intensify over the next 20 years and then stabilize at a higher level in terms of GDP (Figure 5). The spending paths of the different scenarios differ significantly, with higher spending pressures under the ‘exogenous spending’ scenario. The difference exceeds 3.5 percent of GDP at its peak in 2040. Note that by the end of the projection period, the share of health, education and social protection (as percent of total spending) remains close to its initial share, two thirds, in line with the OECD average. However, the path of spending for these variables over the medium- and long-term varies significantly (Figure 6).

Figure 4.
Figure 4.

Chile: Central Government Expenditure 1998-2007

Citation: IMF Staff Country Reports 2009, 272; 10.5089/9781451807707.002.A002

Source: Fund staff estimates.
Figure 5.
Figure 5.

Chile: Long-Term Expenditure Projections

(Exogenous Spending Scenario)

Citation: IMF Staff Country Reports 2009, 272; 10.5089/9781451807707.002.A002

Source: Fund staff estimates.
Figure 6.
Figure 6.

Chile: Long-Term Expenditure Projections

Citation: IMF Staff Country Reports 2009, 272; 10.5089/9781451807707.002.A002

Source: Fund Staff estimates

18. Health expenditure pressures could intensify over the long-term. Although real per capita spending increases for all categories, health expenditure growth could exceed that of GDP, bringing its share from around 4 percent of GDP in 2009 to 6 percent of GDP by 2050. On the other hand, education spending, driven by a decrease in the population under 24, could decrease significantly as percent of GDP. A somewhat less dramatic trend is obtained for environmental spending. After a large initial increase, the trend, as percent of GDP, is moderately negative. In the case of social protection, spending pressures increase markedly in the short- and medium-term, on account of the increase pension-related spending due to the 2008 pension reform and the large increase in the number of retirees combined with larger spending on other social measures such us unemployment benefits. Furthermore, the downward pressure on social protection after 2035 is mostly due to the fall in the growth rate of the retiree population from rates above 4 percent over the period 2021–25, to around 2 percent from then until 2040 and below or around 1 percent thereafter.

19. Under the ‘exogenous spending’ scenario, the fiscal stance would deteriorate significantly. Structural deficits would emerge and additional financing requirements would be needed to capitalize the FRP (Figure 7). As a result, the net position of the central government would become negative by 2022, and reach a net debtor position above 40 percent of GDP around 2045.

Figure 7.
Figure 7.

Chile: Assets and Liabilities of the Central Government Exogenous Spending Scenario

Citation: IMF Staff Country Reports 2009, 272; 10.5089/9781451807707.002.A002

Source: Fund staff estimates.
Table 3.

Chile: Long-Term Fiscal Stance

article image

Incorporating a Stochastic Dimension into the Analysis

20. This section incorporates a stochastic dimension into the previous analysis. The long-term fiscal analysis so far considered paths for real and potential GDP, the effective and long-term copper prices, and copper production (among other) that were chosen as reasonable representations for the variables’ future evolution. This section complements such analysis by adding a measure as to how likely (in a statistical sense) such paths may turn out to be.

21. The projected paths for macroeconomic variables are now derived from a data generating process (DGP) based on a structural VAR (SVAR). The SVAR was estimated using quarterly data for the period 1986-2008 and includes three variables: real GDP, the unemployment rate and the copper price (expressed in real terms). Following Blanchard and Quah (1989), shocks were decomposed into those having a temporary effect and those having a permanent effect on output, and thus, to “recover” potential GDP, based on the actual historical behavior of the variables analyzed.10 The use of such DGP allows to generate alternative paths for future output gaps, (each associated with a specific cumulative probability), which in turn allows to produce alternative paths for (non mining) effective and structural fiscal revenues.11 The combination of the alternative paths of effective and structural revenues, together with an assumption regarding the size of the structural fiscal balance, allows to generate alternative paths for the effective fiscal position and the government’s net financial worth (NFW). The consideration of alternative paths for fiscal and macroeconomic variables allows policymakers to assess the risk, in terms of the increased contingent vulnerability that comes with a lower NFW, behind any decision in terms of the size of the structural surplus balance.12

22. The analysis illustrates the importance of assessing the impact of policy decisions across a number of scenarios, including some with perceived low probability.13 Specifically:

  • Based on the history of macroeconomic shocks through end-2008, 2009 was a low-probability scenario ex-ante. As suggested by information upto December 2008, a closing of the output gap, a reasonable baseline for 2009 (i.e. a scenario consistent with a cumulative 50 percent probability) would entailed assuming a GDP growth rate lower than potential, but still positive (Figure 8). In line with this, and with the decision of the government to reduce the structural fiscal surplus from 0.5 percent to balance, the effective fiscal balance would have gone to a slight deficit (in percent of real GDP). Instead, the latest economic data suggest that GDP would likely contract in 2009 and, and that the effective fiscal deficit will be larger, both of which were ex ante relatively unlikely events.

  • A worse than expected macroeconomic scenario in 2009 has decreased the likelihood of positive NFW over the medium term. Choosing the path consistent with 50 percent cumulative probability as the baseline, the NFW is projected to decrease from about 12 percent of real GDP at end-2008 to about 6 percent by 2030, provided the structural balance target remained at zero beyond 2010. Note however, that the materialization of a more negative macroeconomic scenario (such as in 2009) results in a more rapid decline in the NFW. For instance, if macroeconomic outcomes were to be consistently in the range between (the worst) 25th and 50th percentiles, the NFW could turn negative by 2030, reaching about a net debtor status of 6 percent of GDP. Relatedly, the expected reduction of FEES assets in 2009 (of about US$ 8 bn) implies that the actual NFW path for 2009-10 will be somewhere between the worst 5th and 25th percentiles (Figure 8). Thus, the incorporation of data for the full 2009 year (as it becomes available) would point to a larger probability that the NFW could turn negative in the medium term.

Figure 8:
Figure 8:

Risks to the Medium-term Fiscal Forecast 1/

Citation: IMF Staff Country Reports 2009, 272; 10.5089/9781451807707.002.A002

Source: Chilean authorities and Fund staff calculations.1/ It assumes that copper production remains stable and that the structural balance is kept at zero.

B. Conclusions

23. Chile could benefit from adopting a longer-term approach to short-term fiscal policy formulation. This would help consolidate the current 2–3 year planning horizon and incorporate productivity and demographic factors in the context of fiscal policy discussion and formulation. As these long-term trends are esencially uncertain, the implications of alternative fiscal policy decisions should be evaluated within a stochastic framework.

24. Under certain plausible scenarios, the path for long-term public spending could exceed those associated with different targets for the structural rule. While the outlook for contingent liabilities does not appear to present significant risks, demographic and other Chile specific spending pressures over the medium- and long-term could result in a significant deterioration of the government’s net assets position.

25. The materialization of a number of downside risks during 2009 underscores the need to continue allowing for contingencies in fiscal policy planning. Official projections during 2007-08 expected a continuation of the upward trend in FEES asset accumulation through the medium-term. In contrast, the events of 2009 would suggest a significantly different path for FEES assets and for the net asset position over the medium term.

References

  • Arenas de Mesa, A, P. Benavides, L. González, and J.L. Castillo, (2008), “La Reforma provisional Chilena: Proyecciones Fiscales 2009-2025,” Estudios de Finanzas Públicas, DIPRES, Chile.

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  • Arenas de Mesa, A., and P. Gana Cornejo, (2005), “Proyecciones del Gasto Fiscal Previsional en Chile, Bonos de Reconocimiento: 2005-2038,” Estudios de Finanzas Públicas, DIPRES, Chile.

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  • Blanchard, O. and D. Quah, (1989), “The Dynamic Effects of Aggregate Demand and Supply Disturbances” The American Economic Review, vol. 79, No. 4 (Sep., 1989), pp. 655 –673.

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  • Department of the Treasury, (2007), “Intergenerational Report,” Australia.

  • Di Bella, G., (2008), “A Stochastic Framework for Debt Sustainability Analysis”, International Monetary Fund Working Paper WP 08/58, Washington, D.C.

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  • Garcia M., and R. Rigobon, (2004), “A Risk Management Approach to Emerging Markets’ Sovereign Debt Sustainability with an Application to Brazilian Data”, National Bureau of Economic Research, Working Paper 10336.

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  • Engel, E., M. Marcel, P. Meller, (2007), “Meta de Superávit Estructural: Elementos para su Análisis.”

  • Ministry of Finance, (2009), “Long-Term Perspectives for the Norwegian Economy,” Norway.

  • Velasco, A., A. Arenas de Mesa, L. F. Céspedes, and Jorge Rodríguez Cabello, (2007), “Compromisos Fiscales y la Meta de Superávit Estructural,” Estudios de Finanzas Públicas, DIPRES, Chile.

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1

Prepared by Borja Gracia (ext. 36085), Gabriel Di Bella (ext. 37483), and Martin Cerisola (ext. 38314).

2

See Velasco, Compromisos Fiscales y la Meta de Superávit Estructural (2007).

3

Consistent with the BCCh’s Monetary Policy Report (May 2009).

4

Acta Resultados del Comité Consultivo del PIB Tendencial (August 2008).

5

Every year the FRP should receive no more than 0.5 percent of previous year’s GDP and no less than 0.2 percent even if there is an overall fiscal deficit. The FRP will be used to finance pension spending starting in 2015, by a third of the difference of the increase in pension spending associated with minimum and social pensions between any given year and 2015.

6

The FRP should receive contributions until the Fund reaches 900 million Unidades de Fomento, indexed to inflation and currently valued at around 21.000 pesos.

7

The Bicentennial Fund, announced in 2008, will be used to finance up to 6500 postgraduate scholarships and 3000 professional training outside Chile.

8

All real variables considered in this paper for Chile are obtained by using the non-mining GDP deflator.

9

Chile’s figures refer to the central government which represents around 93 per content of the general government.

10

Following Blanchard and Quah (1989), demand shocks are assumed to have no long-term impact on GDP, while supply and copper price shocks are assumed to have a long term impact on real GDP. Details on the estimated SVAR are available upon request.

11

To complete the calculation of effective and structural fiscal revenues, long term copper production was assumed to remain stable around 2008 levels, with a standard deviation of 2.5 percent. In this connection, using historical values to pinpoint the parameters of a DGP does not yield reasonable results, given the large increase in copper production during most part of the 1990s associated with new mine exploitations coming into stream (in particular Escondida). Consequently, the DGP parameters were chosen based on what is considered to be a reasonable long-term trend.

12

For a similar approach see Garcia and Rigobon (2004), and Di Bella (2008).

13

The results that are reported assume that the structural balance target is maintained over the long term horizon. Alternative results (including with a structural budget surplus of 0.5 percent, and/or declining copper production), are available upon request.

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Cover IMF Staff Country Reports
Chile: Selected Issues
Author:
International Monetary Fund
Volume/Issue:
Volume 2009: Issue 272
Publisher:
International Monetary Fund
ISBN:
9781451807707
ISSN:
1934-7685
Pages:
40
DOI:
https://doi.org/10.5089/9781451807707.002
  • Figure 1.
    View in gallery
    Figure 1.

    Chile: Medium-Term Macroeconomic Dynamics

  • Figure 2.
    View in gallery
    Figure 2.

    Chile: Assets and Liabilities of the Central Government

    (SBR target of 0.5)

  • Figure 3.
    View in gallery
    Figure 3.

    Chile: Assets and Liabilities of the Central Government

    (SBR target of zero)

  • Figure 4.
    View in gallery
    Figure 4.

    Chile: Central Government Expenditure 1998-2007

  • Figure 5.
    View in gallery
    Figure 5.

    Chile: Long-Term Expenditure Projections

    (Exogenous Spending Scenario)

  • Figure 6.
    View in gallery
    Figure 6.

    Chile: Long-Term Expenditure Projections

  • Figure 7.
    View in gallery
    Figure 7.

    Chile: Assets and Liabilities of the Central Government Exogenous Spending Scenario

  • Figure 8:
    View in gallery
    Figure 8:

    Risks to the Medium-term Fiscal Forecast 1/

Figure 1.

Chile: Medium-Term Macroeconomic Dynamics
Figure 2.

Chile: Assets and Liabilities of the Central Government

(SBR target of 0.5)
Figure 3.

Chile: Assets and Liabilities of the Central Government

(SBR target of zero)
Figure 4.

Chile: Central Government Expenditure 1998-2007
Figure 5.

Chile: Long-Term Expenditure Projections

(Exogenous Spending Scenario)
Figure 6.

Chile: Long-Term Expenditure Projections
Figure 7.

Chile: Assets and Liabilities of the Central Government Exogenous Spending Scenario
Figure 8:

Risks to the Medium-term Fiscal Forecast 1/