The closure of the Strait of Hormuz has sent shockwaves through international markets, causing oil prices to spike and impacting U.S. futures. This geopolitical crisis threatens to evolve into an energy shock that will directly affect inflation and growth across global economies.
Saudi Arabia has confirmed significant losses in production capacity and damage to key infrastructure following recent incidents. Meanwhile, talks between the United States and Iran held in Pakistan failed to yield substantial progress, further escalating uncertainty surrounding the conflict.
Impact on emerging economies
The upcoming IMF and World Bank spring meetings in Washington will take place under a state of high alert. IMF Managing Director Kristalina Georgieva has signaled that the institution will present projections reflecting lower growth and increased inflationary pressure for many nations.
Chile will maintain an active presence at these meetings, with Finance Minister Jorge Quiroz and Central Bank President Rosanna Costa in attendance. The goal for local authorities will be to assess the vulnerability of energy-importing economies to supply volatility.
Domestically, the Kast administration faces the challenge of introducing an economic reform package aimed at stimulating the country through tax cuts. The proposal includes lowering the corporate tax rate from 27% to 23%, a move that private economists estimate will result in a $2 billion revenue shortfall for the treasury.
The strategy also includes eliminating the capital gains tax on stock market investments and reintegrating the tax system, which would carry an additional cost of $800 million. The success of the proposal will depend on the Finance Ministry's ability to balance these spending cuts with the need to maintain fiscal stability.
