Chile's Path to a Responsible 2026 Budget Amidst Codelco's Copper Recovery

Chile's Finance Minister Nicolas Grau has outlined a 'responsible' budget approach for 2026, marked by more limited spending increases compared to recent years. In an exclusive interview with Reuters, Grau emphasized a trend of reduced budget expansion since 2023 and projected an average annual growth of about 2%.

State-owned Codelco, the largest copper producer globally, is grappling with production challenges, impacting Chile's primary income source. Grau remains optimistic about Codelco's strategies, including partnerships with Anglo American, to address past production gaps and reinforce its sector leadership.

Amid preparations for a presidential election, Grau anticipates a 2.5% growth driven by over 5% investment increases in carbon-neutral projects. However, addressing an 8.7% unemployment rate remains a key priority. Policy reforms, particularly in permitting processes critical to mining and energy sectors, are in focus for sustained economic growth.