Chile announces new $1.5 billion stimulus for middle class as pandemic rages

SANTIAGO (Reuters) - Chilean President Sebastian Pinera announced on Sunday a new $1.5 billion package of measures to help keep the country´s ailing middle class afloat as the coronavirus pandemic

July 5, 2020

SANTIAGO (Reuters) – Chilean President Sebastian Pinera announced on Sunday a new $1.5 billion package of measures to help keep the country´s ailing middle class afloat as the coronavirus pandemic continues to ravage the economy of the world´s top copper producer.

The measures include access to zero-interest loans, subsidized rent and the ability to defer mortgage loan payments for up to six months, Pinera said in a televised speech.

“The coronavirus pandemic…is hitting our middle class hard,” Pinera said, touting the fresh round of stimulus as a bailout at least 1 million families.

Pinera’s center-right administration has already announced two sprawling stimulus packages worth nearly 12% of gross domestic product, aimed primarily at protecting small business, the poor and the unemployed.

The coronavirus pandemic, which struck just as Chile was beginning to recover from months of unrest over inequality, has hammered the country’s economy. Chile’s middle class – long the envy of the region- has been especially hard hit.

Unemployment crested 11% between March and May and is expected to continue to rise as lockdown measures in the capital Santiago take their toll. The central bank has predicted GDP will plunge by as much as 7.5% in 2020, the worst in 35 years.

The new plan will help subsidize university payments for middle-class families and partially underwrite the home or apartment rental fees for those who pay less than 400,000 pesos, or $500 per month.

Chile has reported more than 295,000 cases of coronavirus, surpassing the tally in crisis-racked Italy, and 6,308 deaths from the disease.

(Reporting by Dave Sherwood; Editing by Lisa Shumaker)