The extreme forest fires in Chile are responsible for the death of 11 people and the destruction of about 1,500 homes. This will cost the government $333 million.
The government will reallocate $100 million from the current budget to mitigate the effects of the blazes, while another $233 million will be taken out of a rainy day fund that the government maintains for such situations, Reuters quoted Finance Minister Rodrigo Valdes.
"Those are the costs that the state will have to assume in the preliminary estimate that we're doing," Valdes said. "That situation can change when we have more information, and it will depend on how the wildfires evolve."
The fire destroyed over 580,000 hectares, while firefighters from Argentina, Brazil, Colombia, France, Japan, Mexico, Panama, Peru, Portugal, Spain, the United States and Venezuela came to help in the fight with almost 41 active fires in the area.
As Reuters reported, forest fires are a regular feature of Chile's hot, arid summers, but a nearly decade-long drought combined with historically high temperatures have created tinder-like conditions in the nation's central regions.
The forestry industry in Chile reported $350 million in losses as of Monday, but the estimates do not include damages to small and medium sized producers, nor private donations. Yet, there is no need for the government to issue debt as to help with the aid effort.
The potential impact on economic growth is still under investigation.