Eyzaguirre Critiques Quiroz, Warns Fiscal Policy Risks Economic Decline

Original article: “La economía se le va a hundir”: Eyzaguirre critica a Quiroz y desinfla la polémica por la caja fiscal Former Minister during the Concertación and Nueva Mayoría governments, Nicolás Eyzaguirre, has downplayed the controversy surrounding the fiscal box, criticizing the government of José Antonio Kast and the current Finance Minister, Jorge Quiroz. He cautioned that the rigidity of the contractionary fiscal policy being proposed could sink the nation’s economic activity. The economist, academic, and researcher pointed out that he finds Quiroz’s strategy to cut public spending unviable, particularly in light of the potential impacts from the U.

S. and Israel’s war against Iran. In an interview with Radio Cooperativa, he argued that the military conflict “is just beginning, as the issue in the Strait of Hormuz won’t just clear up; this route is vital as it handles around 20% of the world’s oil and gas trade.

“This will end with Iran controlling and charging tolls with higher oil prices,” Eyzaguirre stated, noting his previous role as Finance Minister from 2000 to 2006 under former President Ricardo Lagos and again from 2017 to 2018 under Michelle Bachelet. He remarked that the oil shock will be one of numerous negative external factors affecting Chileans, thus challenging Kast’s administration and specifically Minister Quiroz on their state spending reduction policy. In this context, the former secretary of state issued a warning to Minister Quiroz, suggesting that with his agenda to reduce state spending, he must reassess his fiscal policies.

He indicated that the minister “needs to start evaluating what he will do with fiscal policy” and should pause any type of adjustments or cuts due to the risk of the economy collapsing. “This can’t be done because the economy will go downhill. You need to calibrate.

He will have to calibrate. He’ll realize immediately as the Monthly Economic Activity Indicators (Imacec) begin to look terrible. He will have to pause his fiscal policy a little bit,” he explained.

“With this supply shock, inflation rising, and the Central Bank unable to lower interest rates, if he implements a very contractionary fiscal policy, the economy will sink,” Eyzaguirre warned. Eyzaguirre: The Fiscal Box Controversy is ‘Absurd’ In dialogue with the mentioned outlet, the economist deemed the controversy over the alleged “empty fiscal box” a technical distraction lacking macroeconomic foundation. It’s important to note that the figures from the Budget Office (DIPRES) regarding the state of the Treasury indicate that as of February, there is over $3.

6 billion in liquidity in the state treasury. This amount is double January’s figure ($1. 406 billion) and also exceeds December’s $46 million that Minister Jorge Quiroz has cited as evidence of insufficient resources in the fiscal box.

For the Finance Minister, the correct method of evaluating available funds is to assess the end of the complete fiscal year, i. e. , on December 31, 2025, thus insisting that the $46 million is significantly below normal levels.

However, the focal point should not revolve around the previous year’s closing figures, but rather around the current effective liquidity of the state, represented in the so-called Other Public Treasury Assets (OATP) totaling $3. 6 billion. Economist Rodrigo Wagner, former macroeconomic coordinator at the Finance Ministry, noted that there isn’t necessarily a contradiction between the two figures, pointing out it’s a difference in the time observed and the source of the resources.

“I don’t believe there’s a real controversy with the data. The current minister mentioned $40 million at the close of 2025, which is accurate. And as of February, it was $3.

6 billion ($3. 6 billion), primarily due to issuance, not because of surpluses or anything similar,” he stated. Similarly, former Minister Nicolás Eyzaguirre argued that the state of finances should be measured by global solvency indicators rather than by seasonal cash flow.

“This discussion is the most absurd of the absurd. It’s akin to believing one is doing well if there are checks left in the checkbook, and one is not doing well once the checks run out. That has nothing to do with reflecting the strength of the treasury.

That is shown by the country risk, the interest rates at which sovereign bonds are sold,” he asserted.