Política y Sostentabilidad Fiscal en tiempos de Covid-19: El Caso de Chile[Fiscal Policy in Covid-19 Times: The Case of Chile]

The fiscal stimulus initially proposed by the Chilean government to support COVID-19 measures contemplates US$ 17.105 billion and corresponds to 6.9% of GDP. This paper seeks to contribute to the discussion on fiscal policy in times of pandemic by analyzing the country's fiscal measures to address COVID-19 and comparing them with those applied by other countries, and with those used to address the 2009 subprime financial crisis. It also discusses what measures could complement the government's Emergency Plan. The second part of the paper presents a discussion of the evolution of the central government's finances (as a percentage of GDP) from 1990 to 2019. Together with this, the ex post calculation of vulnerability and fiscal sustainability indicators adapted to the Chilean fiscal reality is discussed. In particular, we estimate the following Sustainability indicators: (I) Gross Debt / GDP (Chilean experience and a comparative analysis with countries with a GDP per capita similar to the national one, and emerging countries with a reputation of solid fiscal positions); (II) Net Debt / GDP; (III) Debt Service; (IV) Acid Test for Debt Service; (V) Primary Balance (IMF methodology); (VI) Adapted Sustainable Primary Balance and (VII) Macro-Adjusted Primary Balance.