MONETARY POLICY REPORT
BEFORE THE
PRESENTATION FINANCE
OF THE
COMMISSION
OF THE
HONORABLE SENATE REPUBLIC∗
Rosanna Costa
Governor
Central Bank of Chile
8 June 2022
Introduction
Mr. President of the Finance Commission of the Senate, senator Juan Antonio Coloma;
senators members of this Commission, ladies, gentlemen,
Let me begin by thanking the Commission for inviting the Bank to share our views on recent
macroeconomic developments, their outlook and implications for monetary policy. This view
is presented in detail in the June 2022 Monetary Policy Report, which we have published this
morning. This background is also the rationale behind the decision taken by the Board at
yesterday's Monetary Policy Meeting.
I need to start by noting that inflation in Chile is at its highest level in decades. The rising
inflation phenomenon is affecting many economies; however, the main causes of this
increase vary from one country to another. In Chile, the main factor behind the rise in
inflation continues to be the sharp increase in demand during 2021. Available estimates show
that about two-thirds of the increase in cumulative inflation since the beginning of 2021 is
attributable to domestic factors. This takes into account both the impact of higher demand
and the significant depreciation of the peso over the past two years, much of which stems
from local factors.
In recent months, inflation has brought important surprises, which have been driven by the
impact of high global cost pressures resulting from higher commodity, energy and food
prices, triggered largely by the Russian invasion of Ukraine. This has occurred in a context
in which difficulties in global supply chains are still present, and even worsened as a result
of the confinements in China, the peso remains depreciated and the activity gap remains
positive.
The short-term inflation outlook is risen sharply in response to this combination of factors.
In the scenario I will present in a few moments, the maximum level to which we project
inflation could reach is close to 13% annually in the third quarter of this year.
As for activity, in line with expectations, it started to adjust in the first quarter of this year.
However, the composition of demand shows that private consumption remains high, while
investment is weakening. In the medium term, the adjustment of macroeconomic imbalances
remains the central element for inflation to converge to 3% within the two-year horizon.
The high level of inflation and the higher persistence associated with its main fundamentals
have required a more contractionary monetary policy to achieve such convergence. This has
driven us to raise the MPR to 9% and we estimate that new adjustments of a smaller
magnitude will be needed to ensure inflation convergence to 3% in two years' time. Risks
remain high, particularly because of the level and persistence of inflation I just mentioned.
I will now describe our assessment of the economic outlook and associated risks.
The macroeconomic scenario and projections
As I said before, inflation is still on the rise, and now stands significantly above our
estimates in the March MP Report. With the CPI figure that was released this morning, a
monthly variation of 1.2%, the y-o-y increment of the CPI rose to 11.5% in May.
The core CPI -which excludes volatile items- posted an annual change of 9%. This figure has
remained mainly linked to the sustained rise in the prices of goods, but has recently also
shown a higher contribution from its food and services components, consistent with the
dynamism of consumption during the first quarter of the year and with the adjustments of
indexed prices and utility rates that normally take place in March (figure 1).
The excessive increase in domestic demand in 2021 continues to push inflation up over
the past year. In any case, its recent behavior has been more strongly affected by external
cost pressures coming from price hikes in foods and commodities, plus the persistent
difficulties in production chains and supply at the global level. All this in a context of very
volatile exchange rate in the past several weeks, which is now above its March figure, and a
still high activity gap.
Unlike previous quarters, most of the inflationary surprise of recent months is related
to the prices of foods and volatile items. The inflation accumulated between March and
April -3.3 percentage points- was significantly more than we projected in the March
Report. When broken down, the surprise shows that over 90% of it came from
higher-thanexpected increases in the prices of foods, energy, and other volatile components (figure 2).
Inflation expectations two years out are still above 3% annually, although the biggest
increases are seen in the shorter-term measures. At one year, the median of the surveys
to economists (EES) and financial specialists (FTS) place inflation at 6.2% and 6.8%,
respectively, which compare with 5.3% and 7.4% last Mach. For the end of the monetary
policy horizon, prospects show no big changes with respect to the March Report, remaining
above 3%. The expectations implicit in financial asset prices have also risen further, but these
increases have been concentrated on the one-year horizon.
The inflation expectations of businesses have also increased. Both the Central Bank's
Survey of Price Determinants and Expectations (EDEP) and the IMCE indicate that firms
expect inflation to be close to 8% in a year's time. Moreover, almost 80% of the firms
surveyed under the May Business Perceptions Report expect inflation to be well above what
is considered to be normal over the next twelve months. (figure 3).
Data for early 2022 show that the economy has already entered an adjustment phase,
with a slight decline from the high levels it reached last year. In the first quarter, the
seasonally-adjusted GDP series declined 0.8% from the previous quarter, with a drop of 0.2%
in non-mining GDP. In April, the seasonally-adjusted Imacec series showed a 0.3% drop
compared to March; however, this variation was positive (0.2%) for the non-mining Imacec.
Demand has evolved with a marked difference between private consumption and
investment, where the former is persistently high. First-quarter data show that private
consumption has not lost any significant dynamism and remains above expectations in
March, remaining around the highs observed during 2021. Consumption of durable goods
has undone part of the fall of the end of last year and services consumption has continued to
perform strongly, especially in areas such as health care, restaurants & hotels, and transport,
reflecting that the economy has been easing restrictions.
Gross fixed capital formation (GFCF), in contrast, has shrunk in its every line, as we
anticipated in March. In the first quarter, its seasonally-adjusted series fell by almost 6%
from the previous quarter. The most notable decline was seen in the construction and other
works component, although machinery and equipment also fell (figure 4).
In the labor market, the demand for work has lost strength. This is reflected in the decline
in the online job postings Index from its peak of a few months ago, although it is still above
its levels of mid-2019. The background data for the May Business Perceptions Report also
points to less dynamic employment in the months ahead, in line with business expectations
as reported in the IMCE. This is consistent with declining real wages amid rising inflation.
In any case, the unemployment rate remains below its historical averages, standing at 7.7%
in the February-April quarter (figure 5).
On the external front, global inflation has risen significantly in recent months, with core
inflation accelerating in several economies. In the United States, in addition to high goods
inflation, there has been higher records in services and volatile components of the basket,
amid a still tight labor market and high house prices. In the Eurozone, while energy remains
the main factor behind price increases, food inflation and core measures have accelerated
lately. In the United Kingdom, in addition to higher goods and energy inflation, services have
become more prevalent, amid upward wage pressures. In Latin America, energy and food
prices have continued to drive inflation, which has also passed through to higher prices for
some services (figure 6).
The rise in inflation has occurred in a scenario of high cost pressures around the world.
The continuing impact of the pandemic on global supply chains and commodity prices has
been compounded by the effects of Russia's invasion of Ukraine and recent confinements in
China. Producer price indexes have risen to unprecedented levels and across countries in the
last year, reflecting the higher costs of commodities and intermediate inputs. In addition,
more countries have shown signs of further tightening in their labor markets, which will
continue to put pressure on wages (figure 7).
Against this inflationary backdrop, most central banks have raised their benchmark
rates and/or signaled a path of faster withdrawal of monetary stimulus. The Fed made
its largest rate hike in two decades, anticipating additional raises at upcoming meetings and
a reduction of its balance sheet from June onwards. Sweden, India, and Australia surprised
the market by initiating monetary normalization in the face of increased inflationary
pressures. The European Central Bank confirmed that it will end unconventional stimulus in
the third quarter of this year, although it remains more cautious about raising rates. Central
banks in Latin America have continued to raise policy rates in the face of growing inflation.
(figure 8).
In this context, and comparing with the closing of the March MP Report, global
markets are increasing their risk aversion, reflected in higher long-term rates, falling
stock prices, and an appreciated dollar. In any case, these trends have seen important
changes in the period, with some recent reversal of these changes.
The Chilean market has had a more favorable performance compared with its external
peers. Compared to the end of the previous MP Report, long-term rates have remained
unchanged, the depreciation of the peso is around the average of emerging economies and
stock prices have risen, although specific factors have played a role in the latter (figure 9).
Projections
The persistently high external costs and more dynamic consumption than anticipated
lead to a significant revision of the inflation trajectory with respect to the previous MP
Report. Part of it had already been incorporated in the May policy decision, when the Board
decided to raise the MPR to 8.25%.
The central scenario assumes that the annual CPI variation will continue to rise to
somewhat less than 13% during the third quarter. Then it will begin to decline, ending
2022 around 10%, which exceeds the March estimate significantly.
Core inflation is also revised substantially. Our forecast for December is changed by
2.5 percentage points up from March. In this case, the main changes are due to higher food
prices included in this index, the effect of the exchange rate hike and logistical bottlenecks
in the prices of goods. The greater private consumption that is being observed and the
secondround effects of the increase in expected inflation also play a role.
Looking ahead to 2023 and 2024, the central scenario continues to assume that headline
and core inflation will decline steadily, both to around 3% by mid-2024, i.e., the end of
the two-year policy horizon. In this projection, headline inflation will close 2023 at around
3%, while core inflation will be closer to 4% annually. The decline in core inflation will be
slower than in headline inflation and will start later than anticipated in March, reflecting the
greater persistence of external cost shocks and the importance of second-round effects (figure
10).
A key element for the convergence of inflation to the 3% target within two years is that
the significant imbalances that accumulated in the economy in 2021 are further
resolved. In the central scenario, in 2022 and 2023 the economy will grow below potential,
with the activity gap narrowing gradually and remaining negative for some quarters. This
will be compounded by a slow reduction in the international prices of fuel and foods from
their current levels and a declining real exchange rate (RER), but still remaining above its
averages of the last 15 to 20 years (figure 11). It is important to note that this projection does
not consider changes in the structural parameters of the Chilean economy, which we are
currently updating and will make available later in the year.
The liquidity that remains from the stimulus measures adopted in 2021 will continue to
sustain consumption in the immediate future. However, most fundamentals suggest that
it would weaken in the second half of the year.
In the labor market, job creation continues, but has slowed down compared to previous
months and with lower real wages, in a context in which the unemployment rate remains
below 8%. The financial conditions faced by households have tightened, because of both
higher interest rates and stricter credit requirements. Accordingly, coinciding with the effects
of inflation on households' purchasing power, consumer expectations have deteriorated
sharply in recent months, with worsening perceptions of employment, inflation, and
purchases of goods.
The greater dynamism of consumption during the first part of the year prompts an
upward revision of its growth forecast for 2022, delaying its adjustment to the second
half of this year and 2023.
The opposite is true for GFCF, for which more significant falls are expected this year
and next. Investment fundamentals have also worsened. In the case of financial conditions,
the deterioration that has already occurred in the capital market and the lower levels of
longterm savings for financing investment play an important role. Add to this the revisions to the
Capital Goods Corporation's investment survey, persistently high uncertainty and a pervasive
fall in business sentiment (figure 12).
The adjustment of the 2021 overspending will allow for a reduction in the
currentaccount deficit and an increase in national saving over the policy horizon. Nevertheless,
a current-account deficit similar to that of 2021 -in the order of 6.5% of GDP- is expected
this year, reflecting higher projected consumption and an unfavorable evolution of external
prices. In 2023 and 2024, the deficit will narrow to between 4% and 4.5% of GDP, consistent
with the adjustment in domestic spending. In this scenario, domestic savings will rise from
around 18.5% to 20% of GDP between 2022 and 2024.
Externally, the impulse to the Chilean economy has dwindled, particularly because of
the worsening of global financial conditions in the face of the withdrawal of monetary
stimulus.
The central scenario projections assume that international prices of foods and
commodities will remain high for several quarters. This is consistent with both lower
terms of trade for Chile and tighter financial conditions, given the expected monetary policy
response in the major economies. In addition, the projections consider a slowdown in the
growth of our main trading partners (table 1).
In the central scenario, the narrowing of the activity gap that began early this year will
last for several quarters. Thus, GDP will see annual change between 1.5% and 2.25% this
year, between zero and -1.0% in 2023, and between 2.25% and 3.25% in 2024. Regarding
fiscal policy, for this three-year period, the projection envisages a spending path consistent
with that reported in the last Public Finances Report (table 2).
The Board estimates that, following the hike agreed at the June monetary policy
meeting, further smaller adjustments in the MPR will be needed to ensure the
convergence of inflation to 3% over the two-year horizon. Still, risks are still high,
especially considering the level that inflation has reached and its long-lasting persistence.
Risks surrounding the evolution of the macroeconomic scenario remain significant. The
upper part of the MPR corridor reflects sensitivity scenarios where inflation could
prove more persistent than expected. This could occur if private consumption continues to
show no significant adjustment in the coming quarters. Although its fundamentals suggest
that it should start to weaken in the short term, it cannot be ruled out that it will continue to
be stronger than expected, particularly because of the financing capacity provided by
remaining liquidity and the decrease in the level of household debt during 2021.
Such a scenario may also emerge if strong global cost pressures increase. This would
exacerbate the inflationary problem, triggering a stronger monetary policy reaction by
various central banks in the short term, but increasing the likelihood of a global recession in
the medium term.
The lower part of the MPR corridor accounts for scenarios where inflationary
pressures dissipate sooner than expected. It is possible that the contraction in activity and
demand will be stronger, either due to weaker investment or faster adjustment in private
consumption. Nor can it be ruled out that the external scenario will see a reduction in global
cost pressures and inflation easing in most economies, Chile included (figure 13).
There are also scenarios where the economy would face more significant changes, which
would place growth outside the range of the central scenario projections. One such event
could occur if the unfolding Russian invasion of Ukraine proves much more damaging for
the world economy. It could also occur if global financial conditions worsen even more
significantly, for example, in a scenario where inflation leads to a much larger than expected
tightening of monetary policy in the main economies.
Inflation has risen to levels not seen for decades, and its negative effects on households
are reflected in public concern about this phenomenon. In addition, the two-year inflation
expectations of economists and financial traders remain above 3%, and business expectations
over longer horizons have also risen.
It is important to note that long-lasting high inflations become more persistent and
evidence shows that the cost of adjusting to them rises, with the consequent impact on
the welfare of the population. The Board will be carefully monitoring the evolution of the
macroeconomic scenario, ensuring that inflation convergence to the target is secured over
the two-year policy horizon.
Concluding remarks
Dear senators in this Commission, in closing I will share with you some good news and a
personal thought.
About the good news, as we announced in September 2021, on 23 June we will publish
regional GDP on a quarterly basis. This is an important leap forward in the process of
improving our economic statistics; it provides valuable information both for economic
analysis and for public policy decisions, as it increases the frequency and timeliness with
which we will be able to know the state of the regional economy, information that until today
existed only in annual frequency. It is also a long-standing wish of many senators who,
because of their close ties with the regions, require more detailed and regular information on
the performance of the areas they represent. This effort has been undertaken by a team whose
dedication and effort has allowed us to be at the forefront in these matters.
The new regional GDP series will be launched with the dissemination of data for the first
quarter of this year and will have a lag of 83 days for the first three quarters of the year and
113 days for the end of the year. This publication considers the breakdown of the 16 regions
into which our country is currently broken down administratively. At the sectors level, series
will be published for the activities of mining, manufacturing industry, other goods, trade, and
services. On the demand side, household consumption of durable goods, non-durable goods,
and services will be published.
The regional activity figures complement a number of other efforts aimed at better
understanding the richness and diversity of the country's economy. For almost 10 years, the
Bank has published a quarterly Business Perceptions Report, based on interviews and surveys
with more than 600 representative companies across all regions. This close relationship with
companies throughout the country has enabled us to gain a more detailed understanding of
the economic reality of our country, enriching our view and understanding of the national
economy.
During July, we will complement this information by making available on our website a
compilation of regional and gender-specific statistics produced by other institutions. The
objective is to make information of interest available in a single place, using the Central
Bank's Statistical Database platform. This makes it possible to offer a set of interactive graphs
for dynamic data queries. In a first stage, statistics on activity, employment, sectors, finance,
demographics, and mobility, among others, will be included. I would like to take this
opportunity to thank the different institutions behind these sources that produce these series
and that will allow us to offer them as a whole unit via this platform.
Finally, given the access to new information and the opportunities created by technology, we
will soon begin to publish experimental statistics in several areas of interest. These series do
not meet the same standards as traditional statistics, but they are timely and reliable enough
to be considered in economic analysis. Like some statistical institutions in developed
economies, we believe that, although they are a little less accurate and subject to more
periodic revisions, they are sufficiently useful to outweigh their potential disadvantages.
Thus, during the second half of this year we will publish a daily retail trade index, an indicator
that provides a preview of activity in part of the trade sector. In the same vein, we expect to
publish intermediate consumption statistics, i.e. we will have purchase and sales transactions
between companies in different regions, which will allow us to measure trade within and
between regions, among other new indicators.
In conclusion, I would like to reflect briefly on the current state of our economy and the
important challenges we face. Inflation has risen to levels we had not seen in a long time,
which for some has meant reliving uncomfortable past memories and, for others, enduring
for the first time the costs of rising prices. Whatever the case, inflation is seriously affecting
the well-being of households.
As I have been saying, the inflationary phenomenon we are experiencing is undoubtedly a
global and multi-causal phenomenon, but its intensity is directly related to a series of
domestic factors that, taken together, explain most of the increase in local inflation over the
last year and a half. These include the sharp rise in spending in 2021 and the greater
uncertainty that has kept the exchange rate above its long-term values.
Unfortunately, since March new shocks have been adding further pressure on already high
inflation. These more recent shocks, while mostly of external origin, are not innocuous for
the inflation trajectory over the two-year policy horizon. On the one hand, the increase in
international energy and food prices has been significant and the outlook is for a more
persistent rise than usual, which is considered in our projections. Moreover, these additional
price pressures occur in a context where inflation is not only high and has become more
persistent, but also at a time when the initial causes of the rise in inflation are still in the
process of being resolved. The activity gap remains wide, high consumption persists and the
exchange rate remains above what its traditional fundamentals suggest.
This scenario has an additional difficulty. Evidence shows that high and prolonged inflation
feeds back over time through indexation and the evolution of expectations. A situation where
this dynamic intensifies not only makes it more difficult to bring down inflation, but also
increases the costs of doing so. For some time now, the inflation expectations of finance and
economics professionals have that they foresee a slower convergence of inflation than
projected by the Bank and, more recently, household and business inflation expectations have
risen, a phenomenon that no doubt calls for us to be very careful about downplaying our
efforts to contain inflation.
Against this background, I can only stress once again the importance of our economy being
able to address the imbalances that have accumulated over the past year. The government is
making a very important effort to address the most urgent needs in a targeted manner and
within a budgetary framework that also seeks to stabilize public spending at levels consistent
with the long-term fundamentals of the economy. It has thus expressed the importance of
reestablishing macroeconomic balances in order to be able to build on them to find sustainable
solutions to the multiple problems it faces.
At the Central Bank, we are primarily responsible for bringing inflation down to levels in
line with the 3% target. Consistent with this, in the last year we have applied a very significant
increase in the monetary policy rate (MPR), which already has brought it closer to the levels
we estimate are necessary for inflation to return to the 3% target over the policy horizon, that
is, within the next two years.
A rising MPR is certainly not an innocuous event for an economy. It has impacts in many
areas. Indeed, our projections anticipate that activity will contract for several quarters, an
outcome that is in part the necessary response of the economy to adjust the overspending
seen last year to levels that are sustainable with our productive potential. As complex as it
may seem at the moment, not carrying out this adjustment will only increase the costs of
higher inflation. First, because it will continue to stimulate spending growth beyond what the
economy can afford, intensifying pressures on inflation. Second, because it could severely
damage the confidence that individuals and businesses have in the authorities' control of
inflation, causing price decisions and expectations to lose their long-standing anchor.
Controlling inflation requires that people and businesses are confident that high inflation is
a temporary problem. This confidence is only possible if there is an unrestricted commitment
by the Central Bank to achieve the inflation target, in our case, 3% within two years. This
timeframe's logic is important to remember. On the one hand, it allows the economy a
sufficiently long time span to accommodate significant changes in prices and monetary
policy without entailing excessive costs in terms of lost activity or employment. The current
environment is a good example of this. In the face of a shock such as the one we are dealing
with, a shorter-term target would force a much more significant rise in the rate, thus
increasing sharply the costs to the economy. On the other hand, a 24-month time horizon is
a sufficient time limit for households and firms to avoid being affected by the uncertainty
that could result from being unable to correctly anticipate how inflation will unfold.
At a time when our economy is going through complex circumstances, reducing the spaces
of uncertainty is greatly appreciated. Certainly, some of these spaces are beyond our ability
to act, such as the war in Ukraine or monetary tightening in the world. But there are others
where we do have the power to act. On our side, by assuring all those who live in Chile that
the Central Bank will continue to do everything necessary to bring inflation down and return
it to the defined target within the appropriate time frame. Maintaining and fulfilling this
commitment is vital to help mitigate the costs that high inflation has on Chilean families.
Despite the difficulties ahead, it is also important to recall that we are a country full of
potential and that we have important opportunities to grow, and thus improve the well-being
of all. We have faced a very significant and unusual set of shocks in recent years, and we
have been weathering them with effort and high capacity for technological and productive
adaptation. We must use these potentials and capacities to strengthen our productivity and
our capacity for growth, the only sure and sustainable way to satisfy the needs of our fellow
Chileans. This path is built by each one of us doing our bit. It is up to us, as the Central Bank,
to contribute by achieving price stability. This helps to reduce an additional source of
uncertainty and thus provides better conditions for everyone's capabilities to flourish. On
stability and growth we can build and address the major challenges ahead.
Thank you.
Figure 1
Inflation (1) (2) Core inflation (1) (2)
(annual change, percent) (annual change, percent)
18
14
Headline CPI Core CPI
Goods Services
Volatiles CPI
12
15
10
12
8
9
6
6
4
3
2
0
0
15 16 17 18 19 20 21 22
15 16 17 18 19 20 21 22
-2
(1) Dotted vertical lines show statistical close of March 2022 Report. (2) For details on the different groupings
and their share in headline CPI basket, see box IV.1 in December 2019 MP Report, Carlomagno and Sansone
(2019), and Economic glossary.
Sources: Central Bank of Chile and National Statistics Institute (INE).
Figure 2
Cumulative inflationary surprises in MPR reports
(percentage points)
2 Core goods excl. foods Total foods (*) Volatile energy
Other volatiles Core services Total surprise
1,6
1,2
0,8
0,4
0
-0,4
Jun.21 Sep.21 Dec.21 Mar.22 Jun.22
(*) Sum of volatile and non-volatile foods.
Sources: Central Bank of Chile and National Statistics Institute.
Figure 3
Inflation Expectations
(annual change, percent)
Surveys to analysts (1) (2) Surveys to firms (1)
10 FTS two years out 10 PDES two years out (4)
EES two years out
PDES one year out (4)
FTS one year out
IMCE one year out (3)
EES one year out
8 8
6 6
4 4
2 2
0 0
17 18 19 20 21 22 17 18 19 20 21 22
(1) Response medians are shown. (2) FTS considers the survey for the first two weeks of each month through January 2018. From
February 2018 onwards, it considers the last survey published in the month, including the one prior to the June 2022 Meeting. In
months in which the survey is not published, the latest available survey is considered. (3) Average of trade and manufacturing
medians. (4) Price determinants and expectations Survey carried out on companies by the Central Bank of Chile.
Sources: UAI/Icare and Central Bank of Chile.
Figure 4
Activity and demand indicators
(index, third quarter 2019 =100; seasonally-adjusted series)
140
160 Private consumption 160 GFCF
Domestic demand
Durable goods
Construction & works
GDP
Non-durable goods
M&E
140 140
Non-mining GDP Services
120
120
120
100
100
100
80
80 80
60 60
60
15 16 17 18 19 20 21 22 15 16 17 18 19 20 21 22
15 16 17 18 19 20 21 22
Source: Central Bank of Chile.
Figure 5
Labor Market
Employment IMCE and Online Job Posting Index Unemployment rate
(diffusion index, January 2015=100; moving quarterly average)
(percent)
100 Employment IMCE (*) 150 15
Online job postings index (right axis)
80 120 12
60 90
9
40 60 6
20 30
3
0 0
0
18 19 20 21 22
18 19 20 21 22
(*) Averaged employment indicators in trade, manufacturing, and construction.
Sources: Central Bank of Chile, National Statistics Institute (INE), and ICARE/Universidad Adolfo Ibáñez .
Figure 6
World inflation (*)
a) Headline inflation b) Core inflation
(annual change, percent) (annual change, percent)
10 Eurozone U.K.
10 U.K. Latin America
Latin America U.S.
U.S. Eurozone
8
8
6
6
4
4
2
2
0
0
-2
-2
00 02 04 06 08 10 12 14 16 18 20 22
00 02 04 06 08 10 12 14 16 18 20 22
(*) For Latin America, the simple average of annual inflation of Brazil, Colombia, Mexico, and Peru is used.
Sources: Statistics bureaus of respective countries.
Figure 7
Waiting times at Chinese ports Shipping costs (1) Commodity prices (2)
(average wait, in days) (index, 2018=100) (index, 2018=100)
300
3.5 1,400 From China to the U.S.
Natural gas
China Shanghai
From China to Europe
Oil (3)
1,200
Wheat
250
3.0
Metal index (4)
1,000
200
2.5
800
150
2.0
600
100
1.5
400
50
1.0
200
0
0
0.5
18 19 20 21 22
18 19 20 21 22
20 21 22
(1) Rate for transporting a 40-foot container on the respective routes. (2) For natural gas and wheat, one-month futures are
used. (3) WTI-Brent average. (4) S&P GSCI Industrial Metals.
Source: Bloomberg.
Figure 8
Monetary policy rates
(percent)
15 Eurozone Canada U.K.
Brazil