Finance Ministry issues austerity decree for 2026 fiscal year

The Finance Ministry published Decree 0618 of 2026 that establishes the Spending Austerity Plan for fiscal year 2026 aimed at entities in the National General Budget.

The decree limits personnel plant reforms only when they are at zero cost or generate savings. It also requires prior review for service provision contracts and allows only those that are strictly necessary.

A plan is set to reduce spending on service contracts compared to the previous year. Entities must rationalize overtime hours and limit official vehicle use to business days.

Other measures include restrictions on publicity contracts that promote government management and priority for digital technologies to cut costs. The decree is dated June 17 2026.

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Former ministers discussing reconstruction project amid fiscal concerns.
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Ex-officials and CFA urge government to agree on reconstruction project after fiscal alert

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The Autonomous Fiscal Council warned that the reconstruction project creates deficits until 2031. Former ministers like Mario Marcel and José de Gregorio called for a broad agreement to reduce uncertainty.

Chile's Finance Ministry, under Jorge Quiroz, recommended reviewing 402 programs for the 2027 budget, with 37% in Education, Social Development, and Health. Officials insist no social rights will be cut, aiming for spending efficiency. Responses followed the leak of internal memos sparking criticism.

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The prime minister sent a framing letter to each government member to limit funding requests deemed unrealistic given the urgency of public finances.

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