April 4, 2018 / 8:03 PM / a year ago

Chile says to slash $500 million from budget over four years

SANTIAGO, April 4 (Reuters) - Chile’s new government plans to slash $500 million in spending over four years to reduce a larger-than-anticipated fiscal deficit inherited from its predecessor, Finance Minister Felipe Larrain said on Wednesday.

Conservative President Sebastian Pinera took office in early March, calling for a return to “fiscal equilibrium” in order to combat economic “stagnation” in the world’s top copper exporter. {nL1N1QT0FY}

Larrain said the budget cuts would make good on that promise by sharply reducing the purchase and use of state vehicles, cutting back on state-funded travel and slashing administrative and marketing expenses, among others.

“We cannot continue {spending} at the current rate,” he said.

In total, the cuts will amount to $122 million annually.

Total government spending for 2018 is slated for about $70 billion.

Shortly before leaving office, outgoing President Michelle Bachelet’s government reported it had left a fiscal deficit of 2.1 percent of gross domestic product, instead of 1.7 percent as targeted.

During his campaign, Pinera, who also governed from 2010 to 2014, said he hoped to guide the country to fiscal equilibrium within six to eight years. (Reporting by Dave Sherwood; Editing by Peter Cooney)

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