SANTIAGO, Nov 25 (Reuters) - Chile's Congress on Wednesday approved a 2010 budget that raises government spending next year by 4.3 percent and gives the incoming government room to issue more debt to finance a burgeoning fiscal deficit, the government said.
Social spending will increase by 5.8 percent from a year earlier, representing 68.7 percent of the overall $40.7 billion budget, the government said in a statement. Public investment, focused on infrastructure, will total $7.8 billion.
Budget Director Alberto Arenas said the budget included $450 million of additional leeway for the next government after a December presidential election.
The center-right is tipped to win the election, wresting power from the center-left, which has run Chile since Gen. Augusto Pinochet's dictatorship ended two decades ago, though analysts do not expect major economic policy shifts.
The budget gives the next government room to issue up to $1.8 billion worth of debt beyond $6 billion worth of local and foreign currency bonds already earmarked.
'This will enable the next administration to finance the projected fiscal deficit with a flexible mix of debt and sales of financial assets, to ensure the peso remains at a competitive level,' the statement said.
Finance Minister Andres Velasco said earlier this month leaving room for the next government to issue debt and so avoid having to repatriate dollar savings held abroad could help ease upward pressure on the peso, which has surged around 30 percent against the dollar year-to-date.
President Michelle Bachelet's administration used part of the nation's copper boom windfall savings to spend $4 billion in fiscal stimuli this year to fight the impact of the global credit crisis that plunged the world into the deepest recession in seven decades.
(Editing by Dan Grebler) Keywords: CHILE ECONOMY/BUDGET (simon.gardner@thomsonreuters.com; Tel: +562-370-4250; Reuters Messaging: simon.gardner.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
Social spending will increase by 5.8 percent from a year earlier, representing 68.7 percent of the overall $40.7 billion budget, the government said in a statement. Public investment, focused on infrastructure, will total $7.8 billion.
Budget Director Alberto Arenas said the budget included $450 million of additional leeway for the next government after a December presidential election.
The center-right is tipped to win the election, wresting power from the center-left, which has run Chile since Gen. Augusto Pinochet's dictatorship ended two decades ago, though analysts do not expect major economic policy shifts.
The budget gives the next government room to issue up to $1.8 billion worth of debt beyond $6 billion worth of local and foreign currency bonds already earmarked.
'This will enable the next administration to finance the projected fiscal deficit with a flexible mix of debt and sales of financial assets, to ensure the peso remains at a competitive level,' the statement said.
Finance Minister Andres Velasco said earlier this month leaving room for the next government to issue debt and so avoid having to repatriate dollar savings held abroad could help ease upward pressure on the peso, which has surged around 30 percent against the dollar year-to-date.
President Michelle Bachelet's administration used part of the nation's copper boom windfall savings to spend $4 billion in fiscal stimuli this year to fight the impact of the global credit crisis that plunged the world into the deepest recession in seven decades.
(Editing by Dan Grebler) Keywords: CHILE ECONOMY/BUDGET (simon.gardner@thomsonreuters.com; Tel: +562-370-4250; Reuters Messaging: simon.gardner.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.