Chile's finance ministry said it will submit legislation to Congress on Tuesday seeking authorization to issue up to $6.2 billion in additional debt for 2026. The request was disclosed in an official statement from the ministry.
The revision in borrowing plans follows an update to fiscal projections. The ministry now sees a fiscal deficit of 2.4% of GDP for 2026, a significant upward adjustment from the 1.5% deficit that was assumed in the approved budget.
Financing shortfall and uses of proceeds
Finance Minister Jorge Quiroz described the updated fiscal numbers as creating a financing need of approximately $4.7 billion. In addition to that gap, the government is seeking an extra $1.5 billion intended to meet working capital requirements, settle obligations to unpaid suppliers and reduce floating debt. Taken together, those amounts account for the $6.2 billion authorized borrowing the executive will ask Congress to approve.
The finance ministry's statement also described the current fiscal situation as complex.
Precedent and recent fiscal performance
Chile has used the additional debt-authorization mechanism in the past, notably during the COVID-19 pandemic. The statement noted that the country’s fiscal deficit exceeded the government’s target for a third consecutive year in 2025.
What the request entails
The bill to be sent to Congress requests formal permission to increase the cap on debt issuance for 2026 up to the $6.2 billion figure specified by the finance ministry. The stated breakdown in needs - a roughly $4.7 billion financing gap plus $1.5 billion for working capital and unpaid suppliers and to lower floating debt - is the basis for the authorization the executive will seek.
Context and constraints
The ministry framed the fiscal outlook as challenging, and its formal request to Congress follows the revision to the deficit forecast. Beyond the figures released by the finance ministry, no additional details or measures were included in the statement regarding timing, maturities or specific debt instruments that would be used if authorization is granted.
Key points
- Chile will ask Congress to authorize up to $6.2 billion in extra debt issuance for 2026, according to the finance ministry statement.
- The ministry raised its 2026 fiscal deficit estimate to 2.4% of GDP from the 1.5% assumed in the approved budget, creating a financing need of about $4.7 billion, plus $1.5 billion for working capital, unpaid suppliers and to reduce floating debt.
- The government described the fiscal situation as complex; Chile previously used this additional debt-authorization mechanism during the COVID-19 pandemic, and the fiscal deficit exceeded targets for a third straight year in 2025.
Risks and uncertainties
- Higher-than-budgeted deficit levels - The revised 2026 deficit estimate of 2.4% of GDP, up from 1.5%, indicates a gap between planned and projected fiscal outcomes.
- Short-term liquidity needs - The request includes $1.5 billion specifically earmarked for working capital and unpaid suppliers, highlighting near-term payment pressures.
- Ongoing fiscal strain - The fact that the deficit exceeded government targets for a third consecutive year in 2025 suggests persistence of fiscal pressures.
The finance ministry's statement provides the numerical basis for the upcoming legislative request; additional details beyond the numbers and descriptions supplied in that statement were not provided.