Economist Rodrigo Vergara, senior researcher at the Center for Public Studies (CEP) and Chairman of Banco Santander Chile, has projected a challenging economic outlook for 2026, characterized by global uncertainty and potential pressure on state revenue.
Speaking on the CEP'sMomento Económicoprogram, Vergara noted that it is "very unlikely to be a good economic year" and that any recovery could be delayed until the second half of this year, with more robust performance not expected until 2027.
The expert identified inflation as one of the primary risks to financial stability. According to his calculations, inflation expectations could exceed 5% this year, driven by the impact of conflicts in the Middle East and rising oil prices.
This downward trend in projections is evident when comparing February's expectations, which hovered around 3%, with the current volatility in local fuel prices. However, Vergara noted that two-year inflation expectations remain anchored near 3%.
Risks to fiscal balance
Vergara expressed concern regarding potential fiscal adjustment measures and tax cuts that the José Antonio Kast administration is expected to announce soon. The economist emphasized that any tax reduction must be accompanied by compensatory mechanisms.
"It will be difficult to balance the budget following tax cuts if there is no compensation," the researcher warned. He argued that tax reductions have an immediate impact on revenue, whereas their benefits for economic growth manifest much more slowly.
Regarding monetary policy, the Santander Chairman ruled out short-term interest rate cuts. Echoing the views of Vittorio Corbo, he maintains that high inflation in the second quarter will hinder any monetary easing by the Central Bank.
Finally, the economist noted that labor market recovery remains an ongoing challenge, as employment levels have not yet returned to pre-pandemic levels. However, he noted that the current administration possesses greater legitimacy to implement structural changes, given the widespread perception that the country is in need of transformation.