By Dave Sherwood
SANTIAGO (Reuters) - Chilean President Sebastian Pinera on Thursday announced an $11.7 billion package of emergency measures aimed at saving jobs and protecting small businesses while easing the coronavirus outbreak's impact on the world's top copper producer.
Pinera said he would invoke a special clause in the country's constitution to immediately free up funds without congressional approval. In total, spending on the package will equal 4.7% of Chile's gross domestic product, he said.
"This is an emergency without precedents and requires, as a consequence, that we take extraordinary actions," Pinera said.
The measures include extending unemployment insurance to those who are sick or unable to work from home, delaying tax payments for small businesses, a cash bonus for approximately 2 million workers who lack formal employment, and emergency funds for municipalities.
Finance Minister Ignacio Briones, who spoke after Pinera at the presidential palace, said the plan was aimed at ensuring the "short-term impacts of the coronavirus do not become permanent."
Briones noted that Chile's comparatively low fiscal deficit and good-standing with creditors give it unusual flexibility to deal with the crisis.
Still, Latin America's most open and export-oriented economy is bracing for the worst. The local peso currency and markets are already floundering after months of anti-government protests in late 2019 that lingered through March.
Credit Suisse (SIX:CSGN) said earlier this week it expects Chile's GDP to contract 1.5% this year compared with its earlier forecast of 1.8% growth. The country's coffers are already suffering from a plunge in the price of copper, its top export.
Chile's health ministry has confirmed 342 coronavirus cases in the country, among the highest tallies in Latin America. No one in Chile has died from COVID-19, the respiratory illness cause by the virus.
Pinera on Wednesday announced a "state of catastrophe" to confront the growing outbreak in Chile, giving the government extraordinary powers to restrict freedom of movement and assure food supply and basic services.
The South American nation has already closed schools, shut down its borders and limited public gatherings as the number of coronavirus cases soared.