As the Coronavirus pandemic increases, the economy everywhere is crashing. In South America, as the country’s economy is fighting a battle, Chilean President Sebastian Pinera on Wednesday announced a fresh $2 billion fund to help support the country´s informal workers.
The introduction of the new package announced by Pinera on Wednesday will help those who are not covered by the previous package. The world’s top copper producer- Chile, has already confirmed more than 5,000 cases of the novel coronavirus, one of the highest in Latin America with large swaths of Santiago, a city of 6 million, under lockdown and virtually all non-essential businesses being closed for weeks.
The previous package that was announced by the Chile Government was a nearly $12 billion stimulus package, worth nearly 5% of gross domestic product, which aimed at saving jobs and providing security to small businesses.
In a television interview, Pinera said that this commitment from the government is to make sure that the ongoing crisis does not turn into a permanent one.
He further added that the latest measures would benefit up to 2.6 million informal workers who are not covered by unemployment coverage. During the previous announcement, many in the informal sector who depend on crowded streets to hawk their goods and services were left out.
This second package also grants additional benefits to small businesses, including credit lines guaranteed by the state.
“We have little margin to continue widening the deficit,” said Finance Minister Ignacio Briones, who spoke shortly after Pinera, in the television interview. He further added that the new measures come with a challenging price tag, putting the country’s fiscal deficit at 8% of GDP.
Briones also announced several new strict measures to help pay for the added stimulus. He said the government would suspend all new contracts and salary increases and halt purchases of state vehicles and land.
Meanwhile, many of Chile’s neighbors in South America have also said that they will introduce modem stimulus packages.
Peruvian President Martin Vizcarra said that on Tuesday he was coordinating with several other nations in the region, including Chile, to request a line of credit from the Inter-American Development Bank (IADB) for at least $15 billion to combat the coronavirus.