Marcel resigns

CHILE - In Brief 21 Aug 2025 by Robert Funk

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Chile's Finance Minister, Mario Marcel, widely viewed as a guarantor of economic responsibility, resigned this morning. He claims to have made the move  for personal reasons. The widely held view is that he may take up a position at the IMF. Others say he may join the Jara campaign, although this is unlikely. Marcel leaves a mixed record. Boric's reform agenda depended in large part on a major tax reform, which Marcel was unable to get through Congress. This, together with Congressional opposition and the defeat of the constitutional reforms, changed the direction of the Boric government.  However, Marcel, together with the Central Bank, did manage to get inflation under control, and working with Jeannette Jara achieved a modest change to the pension system (calling it a pension reform is a bit of a stretch). All in all, Marcel was trusted by the markets. Marcel has been replaced by Nicolas Grau, who until today served as minister of the economy, where he has had a less than stellar run. Personally close to the president, Grau is much more vocal in his criticism of the private sector and has had some high profile defeats with regard to major investment projects, such as China's proposed Sinovac vaccine plant.  Questions will obviously be raised as to whether Grau is more willing than Marcel to give in to the temptation to spend to bolster Jara's campaign. Perhaps this explains this afternoon's sharp drop in the value of the peso.