Date first published: 23/12/2025
Key sectors: all
Key risks: political polarisation; governability; policy continuity; civil unrest
Risk development
On 14 December far-right Republican Party candidate Jose Antonio Kast won the presidential election with 58 per cent of the vote, defeating Communist Party candidate Jeannette Jara’s 42 per cent. Kast capitalised on public discontent over escalating crime, immigration and unemployment under leftist President Gabriel Boric. Kast’s agenda includes tougher migration enforcement, fiscal retrenchment and pro-business regulatory reforms, signalling a shift towards a more security- and market-oriented policy stance.
Why it matters
Kast’s resounding victory came amid the country’s relative stability – including peso appreciation of nearly 10 per cent in 2025 and inflation declining towards the Central Bank’s 3 per cent target. Yet, Kast’s win does not constitute a broad mandate for conservative transformation. Rather, it reflects increasing voter disenchantment with political institutions and elites’ perceived inability to deliver improvements in living standards.
Previously expressed in the overwhelming 2020 vote to rewrite the constitution and in widespread protests such as the 2019 ’Estallido Social’, persistent discontent has shaped the country’s pendulum between left- and right-wing presidencies since 2006. Constitutional prohibitions on consecutive terms have reinforced this alternation, contributing to the recent electoral shift. Despite macroeconomic stability, persistent challenges such as 11 per cent unemployment and stagnating growth have fuelled disillusionment with the left under Boric and a reactive shift towards Kast’s renewed neoliberal agenda.
Centering his campaign around restoring order and reigniting growth, Kast has harnessed public discontent with rising immigration inflows and widespread perceptions of escalating insecurity. Kast has pledged mass deportations, fortified border barriers and a tough-on-crime agenda. Yet, the ultimate test of his administration will be economic improvement. Kast has promised substantial tax cuts for businesses, deregulation and incentives for foreign investment to “unleash the private sector’s potential”. Yet, his policies do not represent a rupture with the economic model built on open markets, macro stability, investment protection and technocratic regulation.
With macroeconomic choices constrained by fiscal rules, regulatory stability and central-bank autonomy, Kast will face a challenge his predecessors did: making the existing neoliberal model deliver broader gains. Kast’s proposal to cut public spending by 1.5 per cent of GDP without reducing social benefits illustrates the challenge of balancing fiscal consolidation – after the country missed its fiscal rule for a third consecutive year in 2025 – without deepening inequality. This is further compounded by a fragmented Congress that is likely to temper Kast’s agenda – facilitating security and administrative reforms while constraining substantive economic change.
Background
In March 2026 Kast will take over from President Boric, who took office in 2021 on promises of profound social change amid a 2019-2020 wave of popular revolt against neoliberal inequality. Kast’s win – marking the first far-right president since the end of Pinochet’s dictatorship in 1990 – reflects the demoralisation of Boric’s social base due to his administration’s failures to deliver on core policies. Boric campaigned on reforming the country’s private healthcare and pension systems but faced strong institutional and congressional constraints in office, leading to limited progress. Amid rising crime, his administration also shifted towards a tougher public security stance, alienating parts of his progressive base. The defeat of Boric’s proposed progressive constitution – to rewrite the Pinochet-era one which entrenched neoliberal economic policies – in a 2022 referendum further consolidated his dwindling public support.
Risk outlook
Kast will face increasing demands for security, inclusion and improved living standards from a society far more democratic than during the Pinochet era. However, he will have to balance reigniting growth without incurring social welfare costs against institutional constraints on policy change, a fragmented Congress and a broad electoral base. Thus, he will likely face heightened risks of legislative opposition and renewed popular discontent.