ANALYSIS
Liquidity crisis in Chile: The controversy over the "treasury box" left by Boric's leftist government
According to official figures from the Budget Office (Dipres), the liquidity of the Treasury as of Dec. 31, 2025 was between 40 and 46 million dollars, an exceptionally low level compared to the country's historical standards.
Former Chilean President Gabriel Boric (Archive).
The public finance situation in Chile opened an intense political and economic debate after the change of government. New Finance Minister Jorge Quiroz warned that the outgoing administration of Gabriel Boric left the Public Treasury with an "extraordinarily low" level of liquidity, which has been refuted by former Minister Nicolás Grau and has generated controversy among economists.
Public liquidity at historic low
According to official figures from the Budget Directorate (Dipres), the Treasury's liquidity as of Dec. 31, 2025 was between $40 million and $46 million, an exceptionally low level compared to the country's historical standards. Quiroz himself stressed that it is usual for governments to close their terms with between $3 billion and $4 billion available.
A comparison with previous administrations reinforces this idea. At the end of Michelle Bachelet's second term, in 2017, public liquidity exceeded $3.2 billion, while the second government of Sebastián Piñera left more than $4 billion in 2021. In this context, the level recorded at the end of 2025 marks a significant break in the liquidity position of the state.
Grau's response: A different reading of the data
However, several economists agree that this comparison does not correctly reflect the inherited situation. The key point is that the relevant measurement corresponds to the end of December, since in January a new fiscal budget comes into force. In this context, fresh resources enter the Treasury, both from tax collection and debt placements, which temporarily increases liquidity.
Technical diagnosis: Overestimated revenue
Beyond the specific discussion on the figures, the underlying problem has been warned by the Autonomous Fiscal Council (CFA), an independent body in charge of monitoring the sustainability of public finances.
According to its reports, the fiscal deterioration in recent years responds mainly to an overestimation of revenue in the formulation of the budget. In simple terms, the state projected to collect more than it ultimately took in. Given that a large part of public spending corresponds to commitments that cannot be postponed—such as salaries, social programs or payments to suppliers—the gap forced the use of available liquidity to meet these obligations.
This process progressively eroded the fiscal cash flow, reducing the state's margins.
Deficit and debt: The fiscal context
The 2025 figures reflect this imbalance. The effective fiscal deficit reached 2.8% of GDP, equivalent to roughly $9.5 billion, while the structural deficit, a key indicator for Chile's fiscal rule, stood at between 3.5% and 3.6% of GDP, far exceeding official targets.
At the same time, the central government's public debt exceeded 40% of GDP, reaching levels not seen in recent decades. Although Chile still has assets in sovereign funds, such as the Economic and Social Stability Fund (FEES), these do not replace the immediate liquidity needed for the daily operation of the state.
Why does fiscal liquidity matter?
Having such a low level of liquidity implies, firstly, a lower capacity to react to unforeseen events, such as economic crises or natural disasters. Secondly, it increases the country's financial vulnerability by forcing it to rely more frequently on debt or market conditions that may become adverse. Finally, it also generates operational tensions in the management of the Treasury, which must coordinate cash flows with greater precision to avoid defaults.
The start of the new government
In this scenario, President José Antonio Kast begins his term of office facing a challenging context, marked by low economic growth, pressure on public spending and a gradual deterioration of fiscal accounts.
Minister Quiroz has proposed the need to recover fiscal space through spending adjustments, budgetary reorganization and measures aimed at boosting investment. The low liquidity has thus become one of the first symbols of the state of public finances with which the new administration begins.
It is foreseeable that any attempt at fiscal adjustment or discipline will now be quickly labeled as "austerity" by the same sectors that drove increased spending in years of relative prosperity. The discussion, more than just technical, will once again be ideological.
Beyond the controversy
The pattern is not new. Part of the Chilean left has insisted on a familiar recipe: raising the tax burden, especially on strategic sectors such as mining, expanding public spending with excessive optimism about future revenues and postponing costs to the future. The result is a more demanding state and a less responsive economy.
Thus, Kast is not inheriting an economy in terminal crisis, but a worn-out economy, with less slack and more accumulated risks.
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