A vote in Chile to reject a new constitution on Sunday reduced regulatory uncertainty but does not resolve social discontent or political divisions, rating agencies said on Monday.

The result closes the rewrite process but “highlights ongoing political divisions and social polarization and could increase fiscal pressures,” said a report by Fitch Ratings.

“Political uncertainty will continue to weigh on investment in key sectors and on economic growth, while social spending is likely to increase to address some of the demands that led to the constitutional reform proposals.”

Chile is the world’s largest copper producer and the central bank estimates the country will have zero growth in 2023. The economy is expected to recover in 2024.

In a separate report on Monday, Moody’s said the constitutional process highlights the country’s strong governmental institutions, but failed to address the country’s underlying problems.

“Even with the shift towards policies more focused on social aspects after the 2019 protests, discontent continues among Chileans,” said Moody’s, stating that they perceive deficiencies in coverage and quality of services such as education, pensions, transportation and health, in addition to concern about the advance of crime and lower economic growth.

President Gabriel Boric said after the vote that his government would not pursue a third rewrite of the constitution and would instead move forward with pension and tax reform through the legislature.

“We hope that the Boric government will focus on addressing social unrest through policy changes,” the agency said, highlighting that the main priority will be to approve tax reform.

-Reuters