20171218-法国巴黎银行-Chile_s_election__Back_to_the_future_6页_225kb

Chile's Election: Back to the Future

Core Content

Chile's 2018 presidential election resulted in a decisive victory for Sebastian Piñera, who will return to the presidency in March 2018. His win was unexpected, given his weak performance in the first round, where he secured only 36.6% of the votes. However, in the second round, he won with a wide margin, capturing 54.6% of the votes compared to 45.5% for his opponent, Alejandro Guillier.

Main Points

• Election Outcome: Sebastian Piñera was elected president with a significant margin of victory, marking his return to power after a previous term from 2010–14.
• Market Reaction: Markets are expected to welcome Piñera's victory, as his pro-business stance is seen as favorable for economic growth and investment.
• Economic Outlook: The document forecasts that Chile's economic growth will accelerate to approximately 3% in 2018, aligning with its potential growth rate, supported by a favorable global context and higher copper prices.
• Policy Challenges: Piñera's administration will face challenges due to the lack of a congressional majority. His party, the National Renewal, will need to negotiate with the opposition to implement key reforms.
• Policy Priorities: Key issues for legislative discussion include education and tax reforms, pension fund system, and health insurance. Piñera has expressed willingness to address criticisms of the pension fund industry but opposes its complete replacement.
• Fiscal Situation: The fiscal deficit is expected to narrow from 2.6% of GDP in 2017 to 2.3% in 2018, but the overall fiscal imbalance remains a concern.

Key Information

• Constitutional Term Limits: Piñera cannot serve two consecutive terms, hence his return in 2018.
• Conciliatory Tone: In his victory speech, Piñera emphasized the need for dialogue and consensus with the opposition to ensure progress.
• Opposition Cooperation: Alejandro Guillier, the opposition leader, pledged cooperation with the new administration.
• Moderate Policy Agenda: The fragmented congress suggests that the policy agenda will likely be more moderate, limiting the scope of major reforms.
• Investment Expectations: The victory is viewed as positive for Chile's medium-term growth prospects, particularly due to Piñera's business-friendly policies.

Legal Disclaimer

This document is a marketing communication and not investment research. It is intended for professional clients and relevant persons as defined by financial regulations. The information is based on public sources and may not have been independently verified. BNP Paribas does not provide investment, financial, legal, or tax advice. The document may be subject to conflicts of interest and is not intended for general public distribution.

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