Chile's structural deficit will grow in 2015 from last year, the nation's finance minister said on Thursday, as the government spends more to revive a flagging economy and copper income remains weak on the back of soft prices for the metal. The world's top copper producer ended with a structural deficit, which strips out the impact of the economic cycle, equivalent to 0.5 percent of estimated gross domestic product in 2014, preliminary data shows.
The center-left coalition government of President Michelle Bachelet has pledged to reduce the deficit to zero by 2018, although economists see that as an increasingly difficult goal. "Fiscal spending this year is going through a significant expansion," Finance Minister Rodrigo Valdes said at a business forum. "The budget this year implies an increase of just under 10 percent in spending and almost 28 percent in investment." That meant that the cyclically adjusted structural deficit would increase from last year, added Valdes, who took over the finance minister role in a cabinet reshuffle last month.
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