Santiago, March 12^th, 2020.

Today, Fitch Ratings maintained Chile’s Long-Term Foreign Currency Issuer Default Rating at “A” and revised the outlook from “stable” to “negative”. In Fitch’s view, the negative outlook is due to a more complex and volatile global environment and, on the domestic front, lower growth projections, larger fiscal deficits and public debt, coupled with higher domestic political uncertainty and the persistence of violence.

In this context, the Ministry of Finance reasserts the importance of supporting economic growth and reaffirms its commitment with fiscal responsibility and the gradual reduction of the structural fiscal deficit. The new fiscal consolidation path, laid out by Decree, reflects updated macro-fiscal projections, supports the social agenda and the transitory fiscal stimulus plan to support the economic recovery, while stabilizing public debt in the medium term.

Looking ahead, with respect to the fiscal accounts, the main driver widening the projected fiscal deficit is a lower growth forecast. That being said, additional permanent expenditures of the social agenda will be funded by the Tax Modernization law recently approved by Congress.

Separately, the fiscal stimulus plan currently in effect, which is mainly based on liquidity measures for SMEs and public investment projects, also has the flexibility to ensure public expenditures are coherent with the fiscal policy consolidation path.

Finally, it is important to note that the Republic of Chile is rated “A1” and “A+” by Moody’s and S&P respectively, both with a “stable” outlook, and maintains broad access to international financial markets in favourable and competitive terms.