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

July 7, 2023

Preview Citation

Format: Chicago

Chile: Technical Assistance Report-Fiscal Considerations in Managing Stabilization Funds, (USA: International Monetary Fund, 2023) accessed February 8, 2025

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.

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

Keywords: Fiscal risks, Fiscal stance, Global, IMF's Fiscal Affairs Department, Mexico budget revenues stabilization fund, Natural disasters, Public treasury, Size of stabilization funds, Support fund, Tail risk

Publication Details

Pages:

57
Volume:

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DOI:

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Issue:

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Series:

Country Report No. 2023/249
Stock No:

1CHLEA2023004
ISBN:

9798400249037
ISSN:

1934-7685

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