Spending To Rise, Thanks To Copper

October 2006 | Economic Analysis

The government of President Michelle Bachelet has introduced its budget bill for 2007, which contains provisions for significant increases in social spending and infrastructure. BMI View: The priorities set out in the 2007 budget are unsurprising, given that Bachelet promised during her presidential campaign last year to reduce social inequality and improve economic competitiveness. We think that although the budgetary guidelines are laudable (and reasonable, given the recent copper windfall), it will have expansionary effects, which may feed into both growth and inflation next year.

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