José Antonio Kast Wins Chilean Presidency, Investors Hope for Market-Friendly Reforms

Background on José Antonio Kast

José Antonio Kast, a far-right candidate and founder of the Republican Party, emerged victorious in Chile’s presidential election on Sunday, defeating Jeannette Jara by a significant margin. Kast secured nearly 60% of the votes counted, leading Jara by approximately 20 percentage points.

Jeannette Jara’s Concession and Relevance

Jara, a center-left candidate and member of the Communist Party, acknowledged her defeat about three hours after polling stations closed. She congratulated Kast on his victory, stating that democracy had spoken clearly. Jara previously served as Chile’s Minister of Labor under President Gabriel Boric.

Economists’ Reactions and Market Expectations

Jorge Selaive, Chief Economist at Scotiabank Chile, commented on X (formerly Twitter) that Kast’s substantial victory margin would likely have a significant impact on Chilean financial assets, such as the Chilean peso, interest rates, and the stock market.

Campaign Focus on Crime and Security

As the campaigns neared their conclusion, both candidates exchanged criticisms but primarily focused on crime and security. Kast, speaking in the southern city of Temuco, described a chaotic country and pledged to restore order.

Kast’s Campaign Message

“This government created chaos, this government created disorder, this government created insecurity. We will go in the opposite direction, generating order, security, and confidence.”

Despite Chile remaining one of the safest countries in Latin America, a recent surge in organized crime and immigration has alarmed voters, becoming their primary concern.

President Boric, who ascended to power amidst progressive optimism following widespread protests against inequality, struggled to maintain approval ratings as crime became a pressing issue. Boric attempted to address the problem by increasing police resources, forming task forces against organized crime, and deploying military personnel along the border. However, these measures did not satisfy many voters.

Kast’s Appeal Among Investors

Investors anticipate that a market-friendly government under Kast will accelerate economic reforms, such as deregulation and adjustments to Chile’s capital markets. The country is rich in copper, a key commodity driving its economy.

• Market Reactions to Kast’s Victory:
• The Chilean peso strengthened following Kast’s victory in the initial round.
• Chile’s benchmark stock index rose after the election results were announced.
• Expected Economic Adjustments:
• Kast is expected to push through some economic adjustments if he wins the runoff, despite not securing a clear majority in Congress.

Although Kast’s views were once deemed too extreme by voters in 2021, they have gained traction among an electorate seeking security and growing weary of traditional political parties.

First Presidential Elections with Mandatory Voting

These presidential elections marked the first time Chile implemented mandatory voting for all citizens aged 18 and above, ensuring broader participation in the democratic process.

Key Questions and Answers

• Who is José Antonio Kast?

José Antonio Kast is a far-right candidate and founder of the Republican Party who won Chile’s presidential election.

• Why is Kast’s victory significant for investors?

Investors expect Kast’s market-friendly government to accelerate economic reforms, such as deregulation and adjustments to capital markets.

• What were the main campaign issues?

The primary campaign focus was on crime and security, with Kast promising to restore order and Jara addressing various social concerns.

• How did President Boric handle the crime issue?

President Boric attempted to tackle the crime issue by increasing police resources, forming task forces against organized crime, and deploying military personnel along the border. However, these measures did not satisfy many voters.