Kast promotes fiscal adjustment and security to put the Chilean economy on track

SANTIAGO DE CHILE.- With only three weeks in power, President José Antonio Kast turned Chile around, announcing budget cuts and reversing some key decisions made by his predecessor, the leftist Gabriel Boric.

Kast, a 60-year-old lawyer, promised an “emergency government” to confront crime, irregular migration and reactivate the economy.

In his first days in office, he began the construction of ditches on the borders, stopped the regularization procedures for more than 180,000 migrants, reduced the current expenses of his ministries by 3% and suspended the entry into force of more than 40 environmental decrees to prioritize job creation.

“They are taking away everything that the left did and I don’t think they know what ordinary people feel,” said Rodrigo Araya, a 27-year-old cook from Santiago.

Political scientist Rodrigo Espinoza, from the Diego Portales University, points out that Kast’s changes are to be expected because “it was something he promised during the campaign.”

The new government also announced that it will stop the expropriation of Colonia Dignidad, a German enclave that functioned as a former repression camp during the Pinochet dictatorship (1973-1990), for cost-saving reasons.

fuel increase

But the decision that hits the Chilean economy the most is its severe adjustment to the mechanism that cushioned sharp increases in fuel prices. Last week the price of gasoline shot up by 30% and diesel by 60%.

These measures were executed through presidential decrees and orders.

The executive branch expects savings of 6 billion dollars to reduce the fiscal deficit, which in 2025 closed at 3.6% of GDP. His detractors doubt that he can do so without affecting social benefits.

“Bad sign

Last week Kast faced its first two protests led by environmentalists and students who fear changes to the university education system, in which it also announced that it is evaluating cuts.

In the opinion of Gonzalo Müller, director of the public policy center at the Universidad del Desarrollo, Kast does not seek to “dismantle an alleged legacy” of Boric.

“What there are are many points of friction between decisions made in the previous government that were not shared by the incoming one,” he comments.

A recent survey by the consulting firm Cadem warns of a first blow to Kast’s popularity: it fell from 57% to 43% since he assumed the presidency.

“We are not going to make decisions based on popularity, but on management, good work, and over time things stabilize,” the president said this Tuesday in an interview with local media.

Accountant Wanda Alarcón, 55, supports Kast’s cuts. “You have to adapt to the budget. If you don’t have much in your wallet, you have to tighten up,” he says in the center of Santiago.

The new government has announced that it will relax environmental regulations to boost the economy. “We are not going to make a mistake if we have to prioritize three little trees over 100,000 jobs,” said Daniel Mas, Minister of Economy, in an interview with the newspaper El Mercurio.

Among the regulations that Kast stopped is one to regulate polluting emissions; another for the creation of nine protected national parks and a registry of sanctions for environmental offenders.

Also a decree that expanded the protection of the Humboldt penguin, an endemic species in danger of extinction.

The rule declared this bird a “natural monument”, which could affect economic interests in areas surrounding its habitat.

According to a study led by the expert, its population fell 63% between 2022 and 2025 due to avian flu, the El Niño phenomenon and competition for food with the fishing industry.