2025/12/15 | Andrés Pérez M., Vittorio Peretti, Andrea Tellechea & Ignacio Martínez
No surprises. With 58.2% of the votes in the presidential runoff, José Antonio Kast of the Republican Party expectedly defeated the ruling party’s candidate Jeannette Jara (41.8% of the votes, from the Communist Party) by one of the largest margins since the 2000s, in line with polls. Kast begins his term with the new Congress on March 11, 2026. During his first speech as president-elect, Kast focused his remarks on public safety, calling for unity with the broader right and on the opposition for support.
Kast’s main economic proposals. Kast’s economic platform emphasizes a pro-growth, market-oriented strategy centered on fiscal consolidation, deregulation, and pro-investment measures, including corporate tax cuts, restoring full tax integration, and eliminating certain capital gains taxes to boost investment and provide legal certainty. His labor market agenda focuses on increasing female and youth participation through incentives for formal hiring. Overall, Kast aims to restore long-term growth of around 4% (currently estimated roughly at 2%), raise investment to 30% of GDP (23.5% in 2024), and increase productivity through a smaller, more efficient state and stronger private-sector incentives.
All eyes on the economic team. The president’s sphere of influence in economic policy begins with his cabinet, especially the Ministry of Finance and the Budget Director. Economist Jorge Quiroz is the head of Kast’s economic team, and hence, is likely to lead the Ministry of Finance. Cabinet appointments do not require congressional approval. Then incoming president Boric, announced Mario Marcel (BCCh Governor at the time), as his Minister of Finance in January 2022, prior to taking office in mid-March that year. The president must also appoint the Director of the Tax Authority (SII), and nominate the president of the financial market regulator (Comisión para el Mercado Financiero). Other key roles include senior positions at BancoEstado, Codelco and other state-owned enterprises.
Other important appointments. Central Bank Governor Rosanna Costa will end her five-year term at the helm of the institution in February 2027, but still has two years remaining in her 10-year appointment. Board member Alberto Naudon ends his ten-year term in March, 2028. These nominations must be ratified by the Senate. Several board members of the Autonomous Fiscal Council, including the institution’s president, end their term during the next four years: Hermann González (2026), Joaquín Vial (2027), Marcela Guzmán (2028), and Sebastián Izquierdo (2029). The president Paula Benavides ends her 3-year term at the helm of the institution in 2028 but ends her five-year tenure in 2030; the president is appointed by the government from existing board members.
A window to approve much-needed constitutional reforms. Following the runoff and electoral tensions, it may be easier for Congress to focus and agree on measures that provide long-term benefits, as was the case in January 2022, with the approval of the guaranteed universal pension (PGU). Along these lines, the Boric administration plans on prioritizing constitutional reforms in Congress that reduce polarization and fragmentation in Chile’s political system (more than 20 parties in the Lower House with close to 40 independents of the full 155 members). These measures require an elevated quorum of 4/7, suggesting broad negotiations are required.
Fewer elections in the near term should reduce political tensions. The incoming administration will benefit from an unusually long period prior to the next election (July 2028, municipal and regional primaries), which could reduce tensions and moderate Congress’ appetite for spending measures. Chile witnessed fourteen elections since 2020, a period with unprecedented domestic policy uncertainty.
Our take. While the result was in line with polls, Chilean assets are likely to respond favorably to the confirmation of the shift towards pro-growth policies, especially in the context of historically elevated terms of trade. Governability and safe passage of structural reforms by Congress during the next political cycle will require the Executive’s willingness and ability to build consensus, as the right is slightly below the majority in both houses.