IMF Staff Country Reports

Chile: Technical Assistance Report-Fiscal Considerations in Managing Stabilization Funds

Publication Date:

July 7, 2023

Electronic Access:

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Summary:

Chile’s strong fiscal framework has served the country well. The fiscal rule has helped insulate the budgets from volatility in resource prices and economic activity. The sovereign wealth fund (SWF)—the Economic and Social Stabilization Fund (ESSF) and the Pension Reserve Fund (PRF)—was established to encourage savings over time and has provided buffers for stabilizing the economy. During the pandemic, Chile has appropriately used the ESSF to provide swift and impactful support to protect people. Recent efforts to upgrade the fiscal framework— adopt a medium-term fiscal path, formalize a prudent debt ceiling, and introduce an escape clause—can further safeguard fiscal sustainability.

Series:

Country Report No. 2023/249

Subject:

Environment Fiscal policy Fiscal risks Fiscal stance International organization Monetary policy Natural disasters Public debt Public financial management (PFM)

Frequency:

regular