Ministry of finance reports on Fitch classification report

PRESS RELEASE from the Ministry of Finance of the Republic of Chile

(Machine translation)

March 12, 2020

Today, the risk rating agency Fitch maintained the country's risk rating at “A” and adjusted the perspective from “stable” to “negative”. This, according to the report, due to a more complex and volatile international scenario, and, at the local level, a context of lower economic growth, larger fiscal deficits and public debt, in addition to greater local political uncertainty and the persistence of outbreaks. of violence.

In this context, the Ministry of Finance reaffirms the importance of recovering economic growth, while reiterating its commitment to fiscal responsibility and the reduction of the structural fiscal deficit, as reflected in the recent Decree that sets the new path of convergence of the same. This review is consistent with the implementation of the current social agenda, the growth projections of the economy, the execution of transitory fiscal stimulus plans to reactivate the economy, as well as the stabilization of public debt in the medium term.

In this regard, the main source of widening the fiscal deficit and increasing public debt in the coming years is associated with lower prospects for economic growth and its consequent impact on tax revenues. For its part, the additional requirements of permanent fiscal resources associated with the social agenda will be collected thanks to the Tax Modernization project recently approved by Congress.

Likewise, the economic reactivation agenda under implementation, based mainly on liquidity relief measures for SMEs and short-term public investment projects, has the necessary flexibility to allow a trajectory of public spending consistent with the goal of consolidating the structural balance .

Finally, Moody's and S&P risk rating agencies evaluate the country with “A1” and “A +” ratings, respectively, both with “stable” perspectives.

Likewise, the Republic of Chile has broad access to financing in international markets on favorable and competitive terms.