Unrest in Chile and Colombia: The Economic Impact & Risks Ahead

What are the economic and political implications of the recent social protests in Chile and Colombia, and what does the future hold? In the latest edition of Fixed Interests, Shelly Shetty, Co-Head of Sovereigns-Americas and Richard Francis, Director of Sovereign Ratings and Primary Analyst for Colombia and Chile, discuss how the aftershocks of the recent social unrest impacted the growth outlook and political profile of each of the countries. The overall impact was much more profound in Chile, leading Fitch to significantly revise its previous baseline growth and fiscal forecasts. In contrast, the impact on Colombia’s growth was relatively benign but there were some negative fiscal implications, an area where Fitch already had concerns given the rise in debt to GDP over the past five years. Despite the recent fall in the intensity of the protests, risks and uncertainties remain.