Chile's 2026 Budget Strategy: Balancing Growth and Fiscal Responsibility

Chile's government is planning a 'responsible' 2026 budget with limited spending increases. Finance Minister Nicolas Grau discussed challenges such as copper production issues and unemployment. Codelco, the state-owned copper giant, is focusing on partnerships and permitting reforms to boost investment and economic growth, despite facing production setbacks.

Chile will implement a "responsible" budget strategy for 2026, featuring limited spending increases, according to the country's new Finance Minister Nicolas Grau. In his interview with Reuters, Grau emphasized the need for fiscal responsibility and increased budget flexibility for future administrations, amid a competitive presidential election this November.

Codelco, the world's largest copper miner owned by the state, is battling to recover from past production challenges. The company, which accounts for around a third of the world's copper production, is developing public-private partnerships to enhance its output and maintain dominance in the sector.

Additionally, Grau stressed the importance of accelerating permitting to encourage investment in carbon-neutral projects, a move expected to spur 2.5% economic growth this year. However, he noted environmental permitting reforms in Chile remain a slow process, needing considerable effort for approval.

(With inputs from agencies.)