OF THE
PRESENTATION
OF
CENTRAL BANK CHILE ANNUAL REPORT
BEFORE THE
OF THE
HONORABLE SENATE REPUBLIC*
Rosanna Costa
Governor
Central Bank of Chile
7 September 2022
Introduction
Mr. President of the Honorable Senate, senator Álvaro Elizalde, honorable senators, on
behalf of the Board of the Central Bank of Chile, I thank you for your invitation to present
this year's Annual Report in accordance with the Bank's Constitutional Organic
Law.
In compliance with this mandate, in what follows I will share with you our view of recent
macroeconomic and financial developments in the Chilean and international economies, as
well as their outlook and implications for monetary policy conduct, as contained in our
September 2022 Monetary Policy Report. As is customary at this time of the year, the Report
features a more detailed review of the Bank's balance sheet, an account of the main decisions
adopted by the Board in 2022 to date, and information on the management of international
reserves.
Just three days ago, Chilean voters rejected the proposal for a new Political Constitution
drafted by the Constitutional Convention. It has been a long and intense process of deeply
reflecting on Chile and how each one of us can contribute to its development and the
wellbeing of its people.
With respect to the Central Bank, and as we have done on previous occasions, we value the
widespread recognition expressed during this process in terms of its autonomy, its objectives
and functions, and its eminently technical nature. The commitment of all of us who are part
of this institution has been and will continue to be to contribute to the welfare of our country
and achieving the objectives of ensuring price stability and the normal functioning of internal
and external payments.
Throughout the constitutional debate, important issues arose. Elements such as employment
and financial stability have always been present in our decisions, but we believe it is pertinent
to be more explicit about how they influence them.
At this point, I should mention that the evolution of the Bank's strategic planning process for
the period 2023-2027, on which we are already working, will provide us with an adequate
framework to address this task and other medium-term challenges.
Some examples of this advancement are our agenda on environmental issues, means of
payment, and the compilation of regional statistics with a gender perspective, which will
provide more basic information for the formulation of public policies aimed at overcoming
existing gaps and barriers.
Clearly, the outcome of the plebiscite does not put an end to the debate on Chile's institutional
framework. Various political sectors have stressed the need to give continuity to this process,
with the purpose of constructing a text that is in tune with the will of the great majorities.
From the economic point of view, our past experience teaches us that all these processes
entail a high degree of uncertainty which, if not mitigated, may adversely affect inflation,
growth, and the stability of financial markets.
For our part, we remain ready and available to continue collaborating in whatever the
authorities may request of us, as we did in the process that has just ended, always within the
limits imposed on us by the legal system and the autonomous and technical nature of our
institution.
THE MONETARY POLICY REPORT
Let me now turn to the contents and projections of our September Monetary Policy Report.
I must start by stressing that inflation is on a rising path. The latest available data, for the
month of July, shows that its annual variation exceeded 13%. In recent months, increases in
food prices -volatile and non-volatile- continued to lead, accounting for almost one third
of annual inflation in July. Core inflation -measured by the non-volatile CPI- rose to 10%
year-on-year, with a higher contribution from services and non-volatile foods (figure 1). The
rise in total inflation again exceeded our expectations. The same as in June, the surprise was
concentrated in volatile prices and non-volatile foods.
The CPI is rising in a context of increasing inflation expectations. Different sources of
information have it that short-term inflation expectations have risen significantly. In the
twoyear horizon, surveys to both experts and businesses continue to forecast that inflation will
be above 3% annually at that point, with figures that have also risen in recent months (figure
2). This has also led to more frequent price changes by firms in response to rising demand
and costs over the last two years.
Regarding activity, data for the second quarter and the beginning of the third suggest that the
economy continued its adjustment process after the strong imbalances it accumulated in
2021. In the second quarter activity (excluding mining) fell by 0.5% quarter-on-quarter in its
seasonally-adjusted series. This decline extended to July, where this component of activity
fell 1.1% with respect to the previous month, also discounting seasonality. By sectors, the
decline in trade stood out, and was partially offset by the increase in some services (figure
3).
Private consumption continued to decline from its high levels of 2021. In the second quarter,
seasonally-adjusted, private consumption fell by 2.4% quarter-on-quarter, somewhat more
than expected. The decline was concentrated in goods, especially durables, coinciding with
the sharp depreciation of the real exchange rate (RER) and a significant build-up of
inventories. In fact, both business expectations as measured by the IMCE and the information
gathered in the August Business Perceptions Report (IPN) suggest that in recent months
inventories have grown more than expected (figure 4).
The path of consumption adjustment is occurring in a context where real wages continue to
contract, job creation has slowed, and the liquidity remaining from the 2021 stimulus
measures has been drying up. Between April and July, aggregate employment showed little
increase. By categories, there was a drop in salaried workers, which contrasts with the
increase in the number of employers and self-employed. By sectors, most new jobs were
concentrated in activities related to services, construction and industry, offset by trade and
other economic activities. All in all, the unemployment rate remained below its averages of
the last two decades, standing at 7.9% in July.
The slowdown in job creation has occurred in a context of shrinking demand for workers.
The Online Job Postings index calculated by the Central Bank has seen month-over-month
declines since March, while business expectations (IMCE) regarding three-month
employment have continued to deteriorate and are still in pessimistic territory. According to
our Business Perceptions Survey (EPN) for August, 30% of firms expect that in twelve
months' time their staff will be lower than at present, and only 15% expect it to increase.
However, as can be seen from the results of the August IPN, the difficulty for firms to recruit
workers has diminished, a fact in which the lower demand seems to play an important role.
On the other hand, labor supply has paused its recovery (figure 5). The participation rate has
stagnated in recent months, and is still below its pre-pandemic levels, lagging behind other
economies, as we show in one of the boxes in this Report. This is mainly linked to lags in the
recovery of employment among the under-25 and over-54 age groups, in a context in which
women participation rates continue to be well below those of men (49.9% and 70.1%,
respectively). According to INE publications, among the most important reasons for not
participating in the labor market are family and personal responsibilities, studying, and
retirement.
Gross fixed capital formation (GFCF) continued to decline, in a scenario where uncertainty
is high and business confidence keeps deteriorating. Seasonally adjusted, GFCF fell by 1%
between the first and second quarters, after a 7% decline in the first quarter. In any case, this
performance was somewhat better than expected, influenced by some large-scale investment
projects. By components, the sharp drop in machinery and equipment stood out. Business
confidence (IMCE) continued the downward trend it has followed since the beginning of the
year, especially in the construction sector. This coincides with levels of economic uncertainty
(Depuc) that remain high by historical standards, more restrictive credit access conditions
and high long-term interest rates (figure 6).
-
Despite lower consumption and weaker investment, the current-account deficit
accumulated over twelve months- increased in the second quarter, still reflecting the
magnitude of the 2021 imbalances, which were subsequently compounded by a deterioration
in the terms of trade and high transportation costs.
In the moving year ending in the second quarter of 2022, the current account accumulated a
deficit of 8.5% of GDP, a figure in which the savings-spending imbalance of the government
played a preponderant role, due to the income-support measures adopted in 2021. Households
also showed a significant imbalance, given the liquidation of savings involved in the
withdrawal of pension funds to finance higher levels of private consumption (figure 7).
Although the impact of these phenomena has been receding, this will only begin to show up
in the current account in the second half of this year.
On the external front, the sharp rise in inflation and the response of central banks has led to
tighter financial conditions, which has reduced global growth prospects and increased the
risk of a global recession happening in 2023. Inflation numbers not seen in several decades
have been reached in several economies. Given inflation's higher persistence and
expectations, most central banks have maintained and/or accelerated their interest rate hikes,
where worth singling out are the unexpected magnitude of the hikes and the more restrictive
message from the Fed. The worsening of financial conditions has begun to impact on the
activity and expectations of different agents, in addition to the uncertainty surrounding the
unfolding of the Russia-Ukraine war, Europe's gas supply disruptions, and the weakness of
the Chinese real-estate sector and overall economy (figure 8).
Commodity prices have fallen across the board, driven mainly by lower expected demand
and an appreciated dollar. Compared to the levels prevailing at the close of the June Report,
the prices of oil and copper have fallen between 15% and 20%. On the other hand, the price
of lithium has continued to rise, driven by the strong demand linked to the production of
electric vehicles, while the supply has limited capacity to respond to the challenge.
Food prices have also fallen, although in this case supply-side factors, including the
agreement between Russia and Ukraine to resume grain exports and the improved production
prospects in some relevant countries, have had a greater impact. Global supply chains have
shown some normalization, with freight costs declining. Even though bottlenecks have been
gradually resolved, the risk of new quarantines persists given China's zero-Covid policy. In
this context, external cost pressures are still substantial (figure 9).
Global financial markets have reacted to this scenario by exhibiting high volatility in recent
months. Doubts about the trajectory of the Fed's monetary policy and its potential effects
have been among the main sources of financial fluctuations. Thus, market sensitivity to data
or statements by authorities has increased, with episodes of high volatility and fluctuating
risk aversion. Compared to the close of the last Report, interest rate hikes, stock market
declines, and a global strengthening of the dollar to twenty-year records have been observed.
These movements are consistent with the Fed's hardened messages regarding the monetary
policy efforts needed to reduce high inflation.
In the local financial market, the exchange rate, interest rates, and the risk premium have
shown greater volatility than is observed in other economies. Worth noting is the peso/dollar
parity, which by mid-July experienced unusually high swings, with a marked divergence
from its external determinants, causing distortions in the functioning of the markets and
leading the Central Bank to announce an intervention program (box I.2). Upon said
announcement tensions in the price formation process in the foreign exchange market eased,
with a decrease in volatility and in the exchange rate. Compared to the statistical close of the
June Report, the peso depreciated in both nominal and real terms (figure 10).
Projections
The central scenario does not consider a specific effect of the plebiscite outcome on the
economy. It does assume that uncertainty will gradually subside in the coming quarters, in
the midst of a process where institutional changes continue, allowing institutions and the
economy to function properly.
In the central scenario, headline inflation is estimated to be near its peak for this cycle, which
it is still expected to occur in the third quarter of this year. In the coming months, prices will
begin to slow down the pace of increases compared to previous months, so that annual
inflation will begin to gradually decline.
Inflation projection for the end of 2022 and all throughout 2023 is revised upwards with
respect to our last Report, due to the additional depreciation of the peso and more persistent
inflation. This year will close at 12%, that is, nearly 2 percentage points above the June
forecast. Cumulative surprises in volatile prices and the recent depreciation of the peso
explain much of this correction. By 2023, on average, projected inflation is about 1 pp higher
than in June, reflecting an RER standing between 3% and 4% above its second-quarter
average. In addition, it is assumed that it will remain at these more depreciated levels
throughout the projection horizon, ending the period above its 15- to 20-year averages. At
the same time, the projection considers an increase in second-round and indexation effects,
reflecting the higher persistence of inflation. Current levels and the expected evolution of the
exchange rate are important factors behind the correction of our inflation outlook over the
policy horizon, which more than compensates for the drop in the world prices of fuels, foods,
and other commodities.
The central scenario assumes that inflation will converge to the 3% target within the
twoyear monetary policy horizon. In this projection, annual CPI inflation will end 2023 at around
3.5%, reaching 3% by the third quarter of 2024. Core inflation will see a slower convergence
towards 3%, as a result of the strong persistence already noted and a higher RER (figure 11).
This stubborn inflation persistence calls for a more contractionary monetary policy -in both
nominal and real terms- than foreseen in June, as is summarized in the new MPR corridor
in this Report.
time
To a large extent, the convergence of inflation to the 3% target in two years' is based
on the assumption that the economy will continue to adjust the significant imbalances it
accumulated in 2021. In the central scenario, the economy will grow below its potential for
several more quarters, so that the gap will continue to narrow and will turn negative
beginning at the end of this year. In this scenario, GDP will post annual variations between
1.75% and 2.25% this year, between -1.5% and -0.5% in 2023, and between 2.25% and
3.25% in 2024. For this three-year period, our projection contemplates a fiscal spending
trajectory that is consistent with that described in the last Public Finance Report.
Activity outlook foresees that private consumption will continue to tighten, a result that
largely stems from the expiration of the massive income-support measures adopted in 2021,
as well as from the tightening of monetary policy. About investment, weak performance is
anticipated through the remainder of 2022 and all of 2023, reflecting less favorable financial
conditions, increased business pessimism, a higher real exchange rate, and declining, albeit
slowly, uncertainty (table 1).
The current-account deficit will decrease in the coming quarters, in line with the continued
adjustment of spending on tradables and a much more favorable savings-investment balance
than in 2021. As income stimulus measures will not be repeated, both public and household
savings will improve drastically compared to 2021, triggering a significant drop in the
current-account deficit from the second half of this year onwards. Higher interest rates, the
high exchange rate, and lower international shipping costs will also contribute to this. By the
end of 2022, it will be reduced by more than 2pp of GDP -accumulating 6.3% in the year-
and by 2023 it will be between 3% and 4% of GDP. Measured at trend prices, the deficit
reduction will also be rapid and significant: from around 9% in 2021 to around 3% in 2023.
(figure 12).
The external impulse to the Chilean economy will be reduced mainly due to less favorable
financial conditions and terms of trade, along with lower global demand. The central scenario
anticipates that the Fed's monetary policy will contract somewhat further, and for a longer
period of time, than the Fed announced in the June Fed dots, which will result in long-lasting
restrictive international financial conditions. This is the main factor behind the lower growth
forecast for our trading partners, which will be at 2.6% this year and next. Copper price will
also fall short of previous estimates, averaging around US$3.5 per pound next year. (US$3.7
in June) (figure 13).
This projection considers no changes in the structural parameters. The Chilean economy has
been stricken by important shocks in the last couple of years and the levels of uncertainty
about their medium-term extent are significant. This has made it complex to evaluate their
implications for estimating the structural parameters. In any case, even considering the
current degrees of uncertainty, these parameters will be evaluated in the December Monetary
Policy Report.
Following the decision of the September meeting, the MPR stands near the maximum level
considered in the central scenario of this Report. Future movements in the policy rate will
depend on the evolution of the macroeconomic scenario and its implications for the
convergence of inflation to the target. The Board will be especially vigilant of the upward
risks for inflation, considering both today's high level and the fact that two-year inflation
expectations remain above 3%.
The upper bound of the MPR corridor reflects sensitivity scenarios where the global
inflationary problem calls for a more aggressive response of monetary policy around the
world, particularly from the Federal Reserve. In such an event, there would be a sharp
deterioration in global financial conditions and growth, with sharp declines in commodity
prices and a further appreciation of the dollar. In a scenario where domestic inflation and
expectations remain high, further peso depreciation would require a tighter monetary policy
response than that described in the central scenario. The same would occur if, irrespective of
the cost pressures in the external scenario, local inflationary dynamics proves more persistent
as a result of the high medium-term inflationary expectations of households and firms.
The lower part of the MPR corridor reflects scenarios where inflationary pressures subside
faster. This could be the case if the contraction of activity and demand is more intense as a
result of a faster adjustment of private consumption and/or weaker investment, which would
also negatively affect the performance of the labor market. Nor can it be ruled out that the
external scenario will see a reduction in global cost pressures and inflation easing in most
economies, including Chile. In this case, the Fed's monetary policy response would be less
restrictive than in the central scenario, which would give way to better financial conditions,
a less appreciated dollar globally, and lower external inflationary pressures (figure 14).
The central scenario projects that the pace of price increases will decrease in the coming
months and that annual inflation will begin to decline. However, the risk of a much more
persistent inflationary phenomenon is a concern for the Board. If materialized, it could lead
to further monetary tightening, outside the upper limit of the MPR corridor. This risk is
especially important in a context where inflation has been unexpectedly high for several
quarters and inflationary expectations remain above 3% in the two-year horizon. Quickly
recovering macroeconomic balances will help reduce this risk, while allowing the Chilean
economy to appropriately address a further deterioration of the external scenario.
Final remarks
Our country is facing many important challenges. One of the most relevant
macroeconomically is to reduce inflation, a problem that is putting a heavy burden on all of
us. For more than two decades, inflation was not a matter of public concern and there were
generations to whom it may have seemed an unknown issue. But in recent quarters it has
become a complex issue, which is at the heart of our responsibility as an institution.
Therefore, we must make use of all the tools available to us to bring it back to 3%, without
adding unnecessary costs, of course. I want to be particularly emphatic in saying it: there are
no easy solutions to this problem.
Bringing inflation back to levels that do not affect the population severely, especially the
most vulnerable, necessarily involves restoring the macroeconomic balances and, in this case,
what is required is a reduction in the level of activity and demand. Monetary policy will
continue to contribute to this necessary adjustment in an efficient and orderly manner. The
coordination of macroeconomic policies is essential for this purpose, and in this sense the
contribution of fiscal policy has been paramount.
With yesterday's monetary policy meeting decision to raise the MPR we have brought it to a
level that is near the maximum considered in this Report's central scenario. It is very high,
but it is in line with the levels that inflation has reached and with the challenges we face in
solving the problem.
During the last few months, not only has inflation been high, but its expectations two-years
ahead continue to be above the 3% target. This misalignment is a cause for concern because,
as the inflationary phenomenon becomes more persistent, it makes stabilizing the price level
more difficult and costly. Hence the need to move forward resolutely in order to prevent this
problem from intensifying because, as we well know, it imposes great costs on the
population. Failure to act promptly will only exacerbate the intensity and duration of the
problem, making it more costly to solve.
Indeed, the actions that the Central Bank must take to ensure its convergence to 3% in two
years' time
depend significantly on the outcome of policies with macroeconomic impact. The
ongoing fiscal consolidation process is a key element on the road to restoring economic
balances. In fact, the baseline scenario of this Report assumes, first, that the future path of
fiscal spending will be as outlined in the latest Public Finance Report, a document that
proposes a reduction of the structural deficit to -0.3% in 2026 and, second, that demand
stimulus policies such as those we had during 2020 and 2021 are not repeated. The Central
Bank is responsible for maintaining low and stable inflation, but doing so efficiently at the
minimum costs possible requires coordinated action with the different policies.
If the projections presented in this Report prove true, inflation would be approaching a
turning point. The pace of price increases will slow down in the coming months and annual
inflation will begin to decline. However, in a context where inflation has turned out to be
higher than expected; where inflationary expectations remain above target; where the peso is
weaker than normal; where the global inflationary problem has become more complex and
there are doubts as to how policies to address it will affect the global economy and financial
markets, we must acknowledge that the risk of experiencing a more persistent inflationary
phenomenon is our primary concern. Monetary policy makers will remain attentive to these
developments and, as I mentioned a few moments ago, future movements of the MPR will
be contingent on them.
Urgently resolving the inflationary problem does not imply that we should set aside our
medium-term challenges. More than two years into the pandemic and almost three since the
social unrest of October 2019, our economy has suffered a string of events that have put the
effectiveness of our economic policy framework and the authorities' ability to react to the
test.
In addition to the inflationary effects, some of the measures adopted to deal with the effects
of the pandemic generated significant costs in the local financial market. Withdrawals of
pension funds reduced the size of long-term savings and possibly also the economy's capacity
to react to external shocks, especially under conditions of high uncertainty. Therefore, the
strengthening of financial markets should be an important item on the economic agenda.
That said, the difficulty in resolving or limiting the discussion on some key issues for society,
many of which gave rise to the process of constitutional change, has played a part in our
having historically high uncertainty, which has affected the economy in different ways. For
example, the low flow of new large-scale investment projects, which, according to the
available surveys for the next five years is at its lowest of several years. Another example is
the reaction of the Chilean foreign exchange market in July to the Fed's more restrictive
message. Due to the expected impact of a further rate hike in the U.S. on world demand and
the prices of commodities, these episodes usually come with a greater aversion to risk and a
search for safer assets. The Chilean market, like many others, reacted in that direction, but
here the response was of a much greater magnitude. Actually, there were moments in which
the market presented such difficulties in its functioning that it required a foreign exchange
intervention to stabilize it.
The task of reducing uncertainty is long and complex, but a possible one. Clearly, the recent
plebiscite does not mean the end to the challenge of having a new constitutional framework,
but rather the opening of a new phase. The leaders will have to guide this path, with the will
to bring positions closer together and reach points of convergence that are attuned to the
expectations of society.
On our part and, as I mentioned earlier, we have initiated an intensive process to project our
work and the best way to fulfill our objectives and functions within a changing economic,
political, and social scenario. This process is aimed at developing our Strategic Plan for the
period 2023-2027 that, building on the great progress achieved in the Plan still in effect for
the years 2018-2022, will allow us to focus on the challenges of today and the future.
Going forward, the focus of the new strategic plan will be to continue building trust in the
technical area in order to contribute to the well-being of society in terms of financial stability,
market evolution, technological development and innovation, changes in payment systems
and business development, so as to explore adjustments to the regulatory framework. We
also believe in the importance of preserving stability beyond the current advances in new
technologies, integrating the systemic risk of each activity into the regulation and supervising
the activities that pose the most risk to the system. Of course, all this involves a major
challenge for our institution and those of us who work in it. At the center must continue to
be our staff and our credibility. This can only be nurtured by excellence, service vocation,
ethical and transparent action, respect for our autonomy, and the technical response at the
service of our country's welfare.
Honorable Senators, we are facing an enormous challenge. Chile has been in a complex
economic situation for a long time now, which is affecting broad sectors of the population
and, especially, lower-income people. There is no doubt in my mind that none of you is
comfortable with this situation and, of course, neither are we at the Central Bank. We have
an annual inflation rate of 13% and we have been raising the interest rate by significant
magnitudes for more than a year. This is not at all the position we would like to be in, and it
continues to be a cause for deep concern and day-to-day work. However, we are confident
that monetary policy decisions and their adequacy to local and international challenges will
help inflation to start declining in the last quarter of this year, returning to the 3% target
within the two-year policy horizon. We have our total and absolute commitment to its
reduction and I am certain that we are going to achieve it. It is what the country needs and
we are fully aware that it is the best contribution we can make to the present and future
wellbeing of all Chileans.
Thank you.
Figure 1
Inflation indicators (1) (2)
(annual change, percent)
21
15
Total CPI
Core goods excl. foods
Core CPI
Core services
18
12
Volatiles CPI
15
9
12
6
9
3
6
0
3
0 -3
15 16 17 18 19 20 21 22 15 16 17 18 19 20 21 22
(1) Dashed vertical line indicates statistical cutoff date for June 2022 MP Report. (2) For details on
the different groupings and their share in the total 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
Surveyed inflation expectations
(annual change, percent)
One year out (1) (2) Two years out (1) (2)
10
12
Financial traders (FTS) Financial traders (FTS)
Economists (EES)
Economists (EES)
10
Firms (EDEP)
Firms (EDEP)
8
8
6
6
4
4
2
2
0
0
17 18 19 20 21 22
17 18 19 20 21 22
(1) Median responses. (2) FTS considers survey for first two weeks of each month through January 2018.
From February 2018 onwards, it uses the latest survey published in the month, including the one prior to
the September 2022 Meeting. In the months in which no survey is published, the latest available survey is
used.
Source: Central Bank of Chile.
Figure 3
Imacec
(index, September 2019 = 100, seasonally-adjusted series)
135
Total Manufacturing Trade Services
125
115
105
95
85
75
Jan.19 Jul.19 Jan.20 Jul.20 Jan.21 Jul.21 Jan.22 Jul.22
Source: Central Bank of Chile.
Figure 4
Private consumption
(index, 2019Q3 = 100, seasonally-adjusted series)
160
Private consumption Durable goods Non-durable goods Services
140
120
100
80
60
15 16 17 18 19 20 21 22
Source: Central Bank of Chile.
Figure 5
Employment by occupational category Online job postings and applications
(difference w/ respect to January 2020, thousands) (index, base 100= 3/March/2020, moving 15-day average)
Salaried, formal Salaried, informal No. vacancies
500 260 140
No. applications (right axis)
Self-employed Other (*)
0 220 120
-500 180 100
-1.000 140 80
-1.500 100 60
-2.000
60 40
-2.500
20 20
20 21 22
19 20 21 22
(*) Includes household help, employers, and unpaid family work.
Source: Central Bank of Chile based on National Statistics Institute and Project SABE of Labor Observatory
SENCE and ISCI-WIC, Universidad de Chile, taken from websites trabajando.com and laborum.com.
Figure 6
IMCE (1) Depuc (2)
(diffusion index) (index, 1 January 2012 = 100)
Trade Construction 500
80
Manufacturing IMCE w/o mining
375
60
250
40
125
20
0
0
18 19 20 21 22
18 19 20 21 22
(1) Business Confidence Index. Value above (below) 50 indicates optimism (pessimism). (2) Economic and Political
Uncertainty Index. Moving 30-day average. As from December 2021, the index includes an update to the dictionary of
words used for its construction, as a way of incorporating new elements that influence local conditions.
Sources: UAI/ICARE and Central Bank of Chile based on Becerra and Sagner (2020).
Figure 7
Current account by institutional sector
(percent of GDP, moving one-year average)
Households Government Businesses Current account
10
5
0
-5
-10
-15
1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2
2016 2017 2018 2019 2020 2021 2022
Source: Central Bank of Chile.
Figure 8
c) Probability of a recession within
a) Growth forecast at 2022 (1) b) Growth forecast at 2023 (1) 12 months in developed countries