February 3, 2017 / 6:59 PM / 6 months ago

Chile's forest fires will cost government $333 million, minister says

French firefighters take a break as they help extinguish wildfires in Chile's central-south regions, in Florida February 3, 2017.Cristobal Saavedra Vogel

SANTIAGO (Reuters) - Chile's massive forest fires that have killed 11 people and destroyed nearly 1,500 homes will cost the government $333 million dollars, Finance Minister Rodrigo Valdes told reporters on Friday.

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, Valdes said at a press conference.

"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."

According to official figures, the fires have so far consumed over 580,000 hectares (1,433,000 acres).

Foreign firefighters and specialists from Argentina, Brazil, Colombia, France, Japan, Mexico, Panama, Peru, Portugal, Spain, the United States and Venezuela have teamed up with local rescue teams to fight the 41 active fires.

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.

Valdes said the estimates do not include damages to small and medium sized producers, nor private donations.

Losses for Chile's private sector have been significant in some cases. Chile's forestry industry, one of the country's main export sectors, reported $350 million in losses as of Monday.

Valdes said that the government would not need to issue debt to help with the aid effort and added that they are still calculating the potential impact on economic growth.

Reporting by Anthony Esposito; Writing by Gram Slattery & Anthony Esposito; Editing by Chris Reese and Diane Craft

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