(Reuters) - Chile's rejection of a tax reform put forward by leftist President Gabriel Boric will complicate the country's process of fiscal consolidation and gradually push up the country's debt, a Moody's (NYSE:MCO) executive said on Thursday.
The country's congress on Wednesday refused to move forward with a proposed tax reform meant to finance the president's progressive agenda.
The government can still try to push the initiative through the senate, but it does not have a majority in the upper house.
In a statement, Vice President-Senior Credit Officer William Foster at Moody's Investors Service said that pressures arising from public demands for higher spending on social programs will likely lead to higher than expected fiscal deficits.
He also predicted a gradual increase in government debt, pushing debt to gross domestic product (GDP) levels slightly over 40% in coming years.