In his first global interview as head of the IMF's Fiscal Affairs Department, Chilean economist Rodrigo Valdés said Chile's policies on fuel price surges due to the war in Iran align with IMF recommendations, akin to the UK's. He warned of global public debt exceeding 100% of GDP by 2029 and urged timely fiscal adjustments.
Rodrigo Valdés, former Chilean Finance Minister and MIT economics PhD, took over as director of the IMF's Fiscal Affairs Department in late October 2025. In an interview with Pulso, timed with his semestral Fiscal Monitor release, Valdés described the global fiscal situation as stagnant, with public debt rising as a share of GDP.
"The main reason is that the world making public policy decisions has grown accustomed to deploying fiscal policy when needed, but when things normalize, it forgets the effort required to reclaim fiscal space," he explained. Amid the war in Iran and fuel price surges, he advised targeted, temporary aid for the vulnerable, shunning broad subsidies that inflate global prices.
Valdés praised Chile's measures, likening them to the UK's: "The UK made policies similar to Chile's, and they align with the recommendations we have proposed." Chile enjoys more fiscal room than the global average, though it is drawing on it via deficits and other steps.
On Chile's tax reforms, he urged the "most technical discussion possible," with precise assessments of debt and growth effects to safeguard fiscal stability. The IMF highlighted Chile for optimistic revenue projections and advised stricter fiscal targets.
