Projected budget surplus for 2006 rises from 2.3% to 3.5% of GDP

The projected Fiscal budget surplus for 2006 has been increased from 2.3% to 3.5% of GDP according to unofficial figures announced by outgoing Finance Minister Nicolás Eyzaguirre on February 21st.

Chile’s Fiscal budget surplus for 2005 amounted to 4.8% of GDP (about US$5.6 bn)– the highest on record – reflecting strict adherence to the 1% structural surplus rule which ties spending to long term revenues, requiring the saving of any extra revenue accrued due to cyclical factors.

The Minister also highlighted some key statistics relating to the 2000-2005 Lagos Administration’s time in office:

- The economy grew an average of 4.4% per year in the 2000-2005 period, amounting to 3.3% growth in GDP per capita.

- Net Central Government foreign currency debt dropped from 8.2% of GDP in 1999 to 4.6% by the end of 2005.

- The private sector’s ratio of foreign debt to exports fell to approximately half its level in 1999.

- Exports grew from 22% of GDP in 1999 to 35% in 2005, but this was not merely the result of improved copper prices: non-copper exports increased from 15% of GDP to 20% over the period.

- The trend growth rate of the economy has also risen from 3.8% in 2002 to a projected 5.2% in 2006, and 5.5% for the remainder of the decade.

- Growth in 2006 is expected to be between 5.5% and 6%.

Source: Ministry of Finance