Chile stocks, peso jump after conservative wins presidency

Chile stocks, peso jump after conservative wins presidency

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SANTIAGO, Chile (AP) — Investors gave a warm welcome Monday to the easy victory by former President Sebastian Pinera in a presidential runoff election that is swinging Chile back to the right.

Chile's IPSA stock index soared and the peso strengthened on Sunday's triumph by the market-favorite candidate, a billionaire who ran on a platform of boosting sluggish economic growth in the world's leading copper producer.

"The market reaction has been very favorable and reflects this commitment to make Chile regain its leadership," Pinera told foreign correspondents during a meeting.

During his first term as president, Pinera struggled with large protests over Chile's inequality and demands for education reform and left office with low popularity ratings. But he also oversaw annual economic growth of about 5 percent a year.

The 68-year-old president-elect now proposes to slash taxes on business to revive growth and vows to launch a $14 billion, four-year spending plan that includes fresh investments in infrastructure. Since he lacks majority support in Congress, analysts predicted Monday that he will be able to implement only moderate market-friendly reforms and will struggle to reverse policies launched under current left-of-center President Michelle Bachelet.

With nearly all ballots counted, Pinera won 54.6 percent of the votes to 45.4 percent for former journalist and center-left Sen. Alejandro Guillier, who was supported by Bachelet. Analysts had expected a much closer contest.

Pinera compared Guillier during the campaign to Nicolas Maduro, the socialist president of crisis-torn Venezuela, where people are struggling with triple-digit inflation, shortages of food and medicine and high crime.

During his meeting with reporters Monday, Pinera said Chile hopes Venezuela's government and opposition can soon strike "a good deal that will restore liberties, democracy, the rule of law, and the respect for human rights."

Guillier, 64, had vowed to continue Bachelet's plan to increase corporate taxes to partly finance an education overhaul, reform the constitution and improve the pension and health care system.

But many Chileans have been disillusioned by lagging economic growth during Bachelet's administration, a problem based largely on lower international prices for copper, which is the backbone of Chile's economy. And Pinera's triumph underscored the fractures in her New Majority left-wing coalition.

Pinera won in last month's first round of the election, although he fell far short of what polls had projected. Then on Sunday he outperformed analysts' expectations.

"Pinera managed to gather a big majority of the votes from center-left candidates" who were in the opening round, said Javier Sajuria, a lecturer in politics at Queen Mary University of London.


Associated Press writer Luis Andres Henao in Buenos Aires, Argentina, contributed to this report.

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