Chile has successfully placed 3.1 billion euros (approximately $3.4 billion) in the international bond market. This move follows the recent approval by the Chilean Congress to raise the government's borrowing limit by an additional $6.2 billion. The Finance Ministry indicated that these new bond sales are crucial to address a revised fiscal deficit forecast and to regularize outstanding payments to state suppliers, including many small and medium-sized enterprises.
The government, under President Jose Antonio Kast, had initially sought $17.4 billion in debt sales for the year 2026. However, an updated fiscal scenario, detailed in the Public Finance Report for the first quarter of 2026, revealed a higher-than-anticipated deficit. Finance Minister Jorge Quiroz explained that revenue overestimation and expenditure underestimation led to a projected deficit of 2.4% of GDP, significantly higher than the 1.5% stipulated in the initial 2026 Budget Law. This necessitated an extra $4.7 billion for the basic deficit, plus an additional $1.5 billion to clear existing state obligations.
The additional $6.2 billion authorization is separate from the ceiling set in the 2026 Budget Law, a mechanism previously used during the pandemic to meet unexpected financing needs. This strategy aims to bring transparency and order to the fiscal accounts for the year. The Ministry of Finance had updated its 2026 financing plan in January, but new information led to the request for increased borrowing.
