SANTIAGO, Chile, Thurs. April 9, 2020 (Reuters) – Chilean President Sebastian Pinera on Wednesday announced a fresh $2 billion fund to help support the country´s informal workers as the coronavirus outbreak continues to batter the South American nation´s economy.
Chile´s government had previously announced a nearly $12 billion stimulus package, worth nearly 5% of gross domestic product, aimed at saving jobs and protecting small businesses.
The new measures announced by Pinera on Wednesday seek to aid those not covered by the previous package, a sign of the deepening crisis in Chile. The world´s top copper producer has already confirmed more than 5,000 cases of the novel coronavirus, among the highest tallies in Latin America.
“Our commitment has been to ensure that this transitory crisis does not turn into a permanent one,” Pinera said in a televised address.
Large swaths of Santiago, a city of 6 million, are under lockdown, and virtually all non-essential businesses have been closed for weeks.
The center-right Pinera said the latest set of “emergency measures” would benefit 2.6 million informal workers who lack unemployment coverage. Many in the informal sector, who depend on crowded streets to hawk their wares and services, had fallen through the cracks of previous aid announcements.
This second phase of stimulus also grants additional benefits to small business, including credit lines guaranteed by the state to help bridge the gap while most remain shuttered during the pandemic of COVID-19, the potentially lethal respiratory disease caused by the coronavirus.
Finance Minister Ignacio Briones, who spoke shortly after Pinera, said the new measures come with a daunting price tag, putting the country´s fiscal deficit at 8% of GDP.
“We have little margin to continue widening the deficit,” he said in a televised statement.
Briones also announced several new belt-tightening 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.
Several of Chile´s neighbors in South America have also promised to unleash unprecedented stimulus packages.
Peruvian President Martin Vizcarra said 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.
Chile has over 5,500 confirmed cases and 48 deaths.
(Reporting by Dave Sherwood; Editing by Franklin Paul, Jonathan Oatis and Cynthia Osterman)