Chile should consider tapping sovereign funds in 2017 -finance minister

lunes 11 de julio de 2016 13:20 GYT

SANTIAGO, July 11 (Reuters) - Chile's 2017 budget talks should consider whether the country will tap into its sovereign wealth funds, finance minister Rodrigo Valdes told lawmakers on Monday.

Valdes said use of the funds may be needed at a time when the fiscal deficit is rising, as income from mining investment shrinks. It is expected to rise to 3.2 percent of estimated gross domestic product this year from 2.2 percent last year, he said.

He is awaiting a report from an advisory committee before further advancing in the discussion of whether to tap the funds, he added.

Chile has two sovereign wealth funds, currently valued at a combined $26.7 billion. Unusual for Latin American countries, they were created in the last decade to help fund pensions and as a "rainy day fund" for times of economic stress.

The government used the rainy day fund during the 2009 financial crisis, and made smaller withdrawals in 2014 and 2015. (Reporting by Antonio de la Jara; Writing by Gram Slattery; Editing by David Gregorio)