Pinera Plans Productivity Measures to Boost Chilean Growth
Chilean President Sebastian Pinera plans to boost competition in financial industries and raise energy productivity as part of what his government calls the most significant package of microeconomic reforms in a decade.
Fifty planned measures include reducing taxes on software, paving rural roads and cutting red tape such as payments to state suppliers, Pinera and his Economy Minister Juan Andres Fontaine said today at the presidential palace in Santiago.
Pinera, the billionaire entrepreneur-turned-politician who assumed the presidency in March 2010, is targeting average annual growth of 6 percent over his four-year term and shortening the path toward achieving developed-nation status. The package of reforms aims to boost productivity and innovation to help achieve his goals.
“Our government has set out the task to lay down the foundation so that, before this decade ends, Chile will be a developed country without poverty,” Pinera said. “This is a project for our generation.”
Chile’s gross domestic product probably expanded 9.8 percent in the first quarter, according to the median estimate of 14 economists in a Bloomberg survey. The central bank is scheduled to release its quarterly GDP report tomorrow. South America’s fifth-biggest economy grew 5.2 percent last year.
The economy has changed its growth trend rather than merely recovering from last year’s 8.8-magnitiude earthquake, Pinera said today. Now Chile needs to modernize the state, improve education and make better use of its existing resources, he said.
Fontaine has a year to implement the package of measures, Pinera said.
Finance Minister Felipe Larrain announced yesterday measures to help farmers cope with Latin America’s best performing currency in the past year, including $400 million of loans with “favorable” interest rates.
Chile’s peso has strengthened 15 percent against the U.S. dollar in the past 12 months, more than the other major Latin American currencies tracked by Bloomberg, as the price of its major export, copper, rises and borrowing costs increase.
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