Original article: La promesa se hizo humo en Hacienda: Kast terminará su mandato con las cuentas fiscales en rojo

Kast’s Promises Dissolve: Government to End Term with Fiscal Deficit

The failure of yet another promise by José Antonio Kast was sealed this Tuesday when Finance Minister Jorge Quiroz candidly acknowledged that the government will not achieve fiscal balance  by the end of his administration, thus breaking a core commitment made by the far-right leader when he took power.

The confession came during the presentation of the Fiscal Policy Decree, where the state secretary not only admitted the deviation from the target but also postponed any hint of a positive structural balance for a future administration.

The new fiscal roadmap, mandated by the Fiscal Responsibility Law, forecasts a reduction of the structural deficit from the current 2.6% of Gross Domestic Product (GDP) to 1.5% by 2030. The fine print reveals what the government euphemistically alludes to: throughout Kast’s term, public accounts will remain in the red. The goal of achieving a balanced budget—a promise made with great fanfare—has simply dissolved into thin air.

A Decree of Gradual Goals and a Deferred Commitment

According to the decree, the deficit will decrease from 2.6% in 2026 to 1.8% in 2027, then to 1.7% in 2028, 1.6% in 2029, and finally to 1.5% in 2030. In none of these years does a desired surplus appear, and the strategy, as Quiroz explained, combines the structural balance rule with a “debt anchor” to curb borrowing.

“The structural balance measures the flow, showing how it shrinks each year, but the other sets a very clear limit on debt,” stated the state secretary, who promised to stabilize public liabilities before starting to reduce them after 2028.

As part of the argument justifying this scenario, the minister blamed the “complex fiscal situation” inherited, highlighting a budget law “underfunded” by overestimated revenues and unrecognized expenses.

However, this explanation clashes with the reality that even though Kast’s government has four years to implement the necessary measures outlined in his own decree, it admits that it will not achieve fiscal balance even by the end of the term.

Austerity Measures and Paying Off Debts to Suppliers

Adding to this assessment, the state secretary proposed a fiscal consolidation scheme that will rely not only on cuts but also on economic growth.

He also announced a policy of rationalizing spending, arguing that “every peso spent by the state is a peso from all Chileans,” along with a modernization of public companies, though he provided no specific details.

In an attempt to defuse criticism surrounding the budget cuts affecting Ministries, the head of the treasury dismissed reductions in social benefits. “There are social benefits that are very important, but they are sometimes delivered in an inefficient manner,” he stated, while emphasizing that this will be the Executive’s “focus,” as reported by Diario U. de Chile.

The presentation included a revealing fact: part of the increased authorized borrowing—1,500 out of 6,200 million dollars—will be allocated to paying state suppliers. In other words, Kast’s government is seeking to take on more debt to settle its own debts.

Quiroz’s message was clear: Kast’s promise to hand over a country with balanced public accounts has evaporated in the hallways of the Treasury, or at least been postponed until the next decade.