NG banco
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I Chile

MONETARY POLICY REPORT

PRESENTATION BEFORE THE HONORABLE
SENATE OF THE REPUBLIC*

Rosanna Costa
Governor
Central Bank of Chile
4 September 2024

*The September 2024 Monetary Policy Report (IPoM) can be found online at www.bcentral.cl

Introduction

Mr. President of the Senate, senator José Garcia Ruminot, honorable senators, ladies,
gentlemen: On behalf of the Board of the Central Bank of Chile, I am grateful for your
invitation to present the Report that, pursuant to the Constitutional Organic Law of the

Central Bank, constitutes our annual account before the Senate.

In complying with this obligation, I will share with you our view of recent macroeconomic
and financial developments in the Chilean and international economy, as well as their
outlook and implications for the conduct of monetary policy, according to the contents of

the September 2024 Monetary Policy Report (IPoM) that we published this morning.

This IPoM is inserted in a scenario in which the national economy is advancing towards
growing in line with its medium-term trend. The large imbalances of previous years have
been resolved at an aggregate level; inflation has dropped to near the 3% target; and
monetary policy has significantly reduced its contractionary stance, considering the 25 basis
point (bp) reduction that we decided yesterday, we have already accumulated a reduction

of 575 bp in the monetary policy rate (MPR).

We face some challenges in the short term. In the second quarter, activity and demand were
weaker than at the beginning of the year. Although slower growth in activity was expected
compared to the first quarter, the decline was greater than expected. On the demand side,
the analysis of the deseasonalized quarterly series highlights the fall in consumption and
the stability of investment. As long as the economy evolves as projected in the central
scenario, we will continue to reduce the monetary policy rate, taking into account the
evolution of the macroeconomic scenario and its implications for inflation. I will address all

of this in more detail in a few moments.

Bearing in mind that this presentation is an annual account, I would like to briefly review
the progress of our Strategic Plan. It is worth mentioning that, since 2004, the Bank designs

a navigation chart for the five-year period that corresponds to each Governor. In this context,

under the current administration we are developing a plan that covers the period 2023-2027,

now in its second year of implementation.

As lexplained a year ago, this Plan was prepared on the basis of a broad consultation process
both with the Bank's staff and with external reference groups, including the regions. The
advances of the immediately preceding Plan were incorporated into the current Plan, thus
providing continuity to the Central Bank's ongoing efforts to adapt to a rapidly changing

environment and prepare to face the challenges ahead.

The Plan's objectives are organized around four focuses. The first seeks to strengthen the
cutting-edge nature of monetary and financial policies; the second aims at strengthening
collaboration and efficiency as a hallmark of the organization; the third is oriented at
enhancing the development of the people who work at the Bank; and the fourth is aimed at

strengthening the commitment and bond with society.

A relevant focus is to continue developing our know how, enhancing models and analytical
tools, always adding ground-breaking knowledge, precisely to strengthen the Bank's
capacity to react to the challenges posed by more volatile markets and more complex

geopolitical environments.

Along these lines, we have been increasingly incorporating the use of microdata in our
macroeconomic and financial analyses. We are also working with technological innovations
for the development of experimental and natural capital statistics. We have also expanded
the dissemination of regional macroeconomic statistics, which also serves the purpose of

strengthening our commitment to and connection with society.

This Plan also assigns a relevant role to the payment system because of its impact on the
economy's functioning. Payment systems are evolving rapidly, and we must continue to
open up spaces for innovation, which will make it possible to expand access to and coverage
of these tools, while preserving safety and efficiency. The latter includes adapting the
regulation and also maintaining adequate coordination with other authorities and

participants. Our Payment System Report has been incorporating the developments and

challenges of this agenda, stressing the need to continue advancing, on the basis of a work
that is internationally renowned, but that maintains some significant gaps with respect to

developed economies.

Likewise, as the Strategic Plan progresses, we have been adding new challenges, which arise
from promoting innovation, understood in its broadest sense, in all areas of the Bank. For
example, to address the growing use of Artificial Intelligence, seeking the best way to

balance its benefits and risks.

As I was saying, the progress of the Plan has a crucial basis in the work and commitment of
the Bank's teams, and that is why we are giving priority to professional development,
harmony between work and personal life and the promotion of good working practices,

based on respect as a fundamental principle.

We are proud to have been awarded third place in the Best Place to Work for Women, which
recognizes the impulse we have given to inclusive work and the reduction of gender gaps.
The same with the 5th place obtained in the same ranking for organizations in the 251 to

1000 employees category.

One of the purposes of our Strategic Plan is to promote greater participation of women in
STEM areas (science, technology, engineering and mathematics), which are crucial fields for
the future. We want the Bank to take advantage of all the wealth that exists in the diversity
of talent, and that is why we are implementing initiatives that target those areas where

women's presence is limited.

The Plan also seeks to intensify the Bank's connection with the regions. For this reason, we
are expanding our program of presentations of these Monetary Policy Reports and the
Bank's activities in different cities across the country. We have also opened spaces for
listening to specific audiences. All of this, together with intensifying our financial education

endeavors.

This navigation chart considers one of the most historically relevant milestones for our

institution: on 22 August next year the Central Bank of Chile will commemorate its

centenary, 100 years since it was created during the administration of President Arturo
Alessandri Palma. We are doing intense work to publicize how the Issuing Institute has been
a key contributor to the development of the country and the welfare of all its inhabitants,

the basis of the trust that citizens have placed in us.

This Strategic Plan allows us to better manage our activities and achieve our objectives. In
this way, we can accurately assess our progress, detect opportunities for improvement in a

timely manner, and overcome new challenges as they arise.
I will now turn to the details of the contents of the Monetary Policy Report.
The Monetary Policy Report

Economic activity lost momentum in the second quarter. As we anticipated in different
Reports, part of this reduction was expected, as the dynamism of early 2024 was affected by
transitory factors. However, the magnitude of the reversal was somewhat greater than
expected. Thus, the seasonally adjusted series of total and non-mining GDP fell by 0.6% in

that period, a figure that contrasts with the slight increase foreseen in the June Report.

Part of the difference was explained by the decline in activities linked to services and another
part by the impact of some one-off supply elements linked to the availability of fishery
resources in the industry, the effects of storms and maintenance downtime in mining
operations (Figure 1). July's Imacec showed a significant acceleration of month-on-month
activity, although once again a significant part was due to these transitory factors. All ina

context of highly volatile figures.

Demand also underperformed in the second quarter, driven by private consumption.
Compared to the deseasonalized series, household spending on non-durable goods and
services decreased from the quarter before, breaking the upward trend of previous periods.
This behavior takes place in a context in which, in recent times, several of its fundamentals

have evolved in line with expectations (Figure 2).

Gross fixed capital formation (GFCF) stabilized after the sharp drop of the second half of
last year. GFCF performed better than expected in the second quarter of this year, explained

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by both the construction and works and machinery and equipment components. In this
Report we present high frequency indicators for investment that reveal important
differences between sectors. These show that the weakness observed in the vast majority of

items is counterbalanced by the dynamism of mining investment (Figure 3).

Total annual inflation rose to 4.4% in July, while core inflation stood at 3.4% (benchmark
series). The higher headline inflation than we expected in the last IPoM was associated with
volatile items, mainly due to the increase in electric bill and the prices of goods included in
this CPI measure. On the core side, annual services inflation is still above goods inflation.
The evolution of the latter again reflects a moderate pass-through of the exchange rate

increases and international shipment costs in recent months (Figure 4).

Market inflation expectations show a sharp contrast between the short and medium term.
In line with financial asset prices, at one year there is a significant increase (+90 basis points
from the previous IPoM), while at two years they remain aligned with the 3% target. As for
expectations for the monetary policy rate (MPR), at one year they decreased by 30 bp since
the last IPoM, and by a smaller fall at two years (Figure 5). This is in line with real interest

rates, which have been falling for some months now.

The MPR cuts have continued to be passed through to bank lending rates in line with usual
patterns. The interest rates on commercial loans have fallen by 630bp compared to the first
quarter of 2023, while consumer rates have fallen 350bp. Mortgage rates - which are less
related to short-term MPR adjustments- have seen a much smaller decline: in the order of
20bp from their late 2023 highs. Long-term interest rates have retreated since the end of
June, following the trends in major economies. Even so, they remain high by historical

comparison.

Bank credit remains weak, especially in its commercial component, amid conditions of fairly
unchanged access to financing. In commercial loans, this result is consistent with the
behavior of sectoral investment, which is dynamic for mining, as it uses foreign direct
investment more intensively to finance itself, and is weaker in the rest of the sectors, which
borrow more intensively from banks (Figure 6).

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The Central Bank monitors the evolution of credit on a constant basis. One of the boxes
included in the Report shows that, considering all sources of financing for firms, its behavior
does not differ much from that of other economies. This reflects the relevance of global
factors in credit performance. Among them, active credit policies during the pandemic
helped to expand credit beyond what its fundamentals would predict. Then, the end of such
policies, along with the increase in interest rates and the onset of a slower growth process
during 2023, have contributed to debilitate credit dynamism worldwide. In comparative
terms, in our country the countercyclical role in the first phase stands out positively, and a
somewhat greater decrease in the second phase, although still at above-average levels. In
any case, it should be noted that the analysis considers total credit to firms at an aggregate

level, and therefore does not address possible heterogeneities by sectors, firm size, or other.

On the external front, reports from the United States continue to dominate the panorama.
The last few weeks have been marked by the markets' assessment of the American
economy's growth and the actions of the Federal Reserve (Fed). After the latter signaled the
imminent start of the Fed funds rate (FFR) cutting cycle, short- and long-term rates have
declined in major economies and the dollar has depreciated globally. Market expectations
for the number of Fed funds rate cuts this year went from two in June to near four at the
close of this IPoM (Figure 7). In any case, this week we are seeing a new episode of
heightened risk aversion, which again highlights the high volatility that financial markets
are experiencing and the importance of incoming news pointing in one direction or the

other.

The Chilean peso has mirrored the movements of global markets, responding to
international volatility. Between June and early August, the exchange rate depreciated
significantly, affected by the external variables' movements that impacted the copper price
and the market's risk perception. After this, the peso appreciated to close to $915 pesos per
dollar, amid the weakening of the dollar globally and the recovery of the copper price after

some weeks of declines. In the last few days we have seen a new depreciation of the peso,

in line with what is happening with global currencies. However, compared figures at the

statistical close of this Report and the previous one show only minor differences (Figure 8).
Structural parameters

In this Report we have updated our structural parameters' estimates. The last one dates back

to December 2023.

These parameters correspond to unobservable economic variables and are presented under
long-term equilibrium conditions. This means that they cannot be measured in practice -
as is the case with activity over a quarter or a year, for example- and as such they are

estimates.

Estimating structural parameters on a regular basis is important because these variables
change over time. They provide information, for example, on the economy's medium-term
growth capacity or where the interest rate should be in long-term equilibrium. Therefore,
they serve as a guide to evaluate the current state of the macroeconomy and to calibrate

monetary policy.

In the case of trend growth, as usual, the estimation breaks down GDP into mining and non-
mining sectors. For non-mining GDP, the methodology is based on a production function
in which long-run growth depends on trend growth in total factor productivity, labor force,

hours worked, human capital and physical capital.

On this occasion, we estimate that non-mining trend GDP growth will average 1.8% in the
2025-2034 period. The figure is 0.1 percentage points lower than the previous estimate,
which is mainly explained by the change in the reference decade, due to the gradually

declining incidence of the recovery of labor participation to pre-pandemic levels.

As usual, our trend growth estimation considers alternative scenarios. While these also yield
lower ten-year trend growth figures, there is an optimistic scenario in which the decline is
smaller. That trajectory considers a more favorable convergence of hours worked and labor
participation to OECD levels and greater investment in non-mining projects associated with
the energy transition that could have significant impacts on the level of investment in the

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next decade. The pessimistic scenario, on the other hand, considers a less favorable

convergence to OECD levels in terms of labor participation and hours worked (Figure 9).

On the other hand, the neutral MPR is the level of MPR that is consistent with growth
around trend and with inflation at the 3% target. When the MPR is around neutral, it is
considered neither expansionary nor contractionary, i.e., it is neutral from the point of view

of the stimulus it provides to the economy.

This neutral rate is estimated using a broad set of methodologies that capture different
determinants of the neutral rate, including external and domestic financial conditions and
trend growth. This update maintains the range of estimates for the nominal neutral MPR
between 3.5 and 4.5%. For the purposes of our projections, we use a working assumption of
4% nominal. After the upward revision of this parameter in the last two updates (December
2022 and December 2023), this time we maintain the previous range of estimates, which
reflects the degrees of uncertainty surrounding this parameter. It is important to mention

that this assessment is consistent with recent revisions in other economies.
Projections

Our projections for activity and demand continue to see the economy growing around trend
over the next few years. For 2024, the range for projected GDP growth is reduced at the high
end, to between 2.25% and 2.75% (2.25%-3.0% in June). This revision owes largely to the
second-quarter result. For 2025 and 2026, the projection remains in a range between 1.5%

and 2.5% (Table 1).

Private consumption will regain momentum, although its level at the end of the projection
horizon will be lower than in the previous estimate. The evolution of several of its
fundamentals, such as the lower borrowing costs and the increase in the real wage bill,
suggests that its recent moderation will be short-lived. However, employment growth has

slowed at the margin, which we should continue to monitor.

Towards 2025 and 2026, private consumption is expected to grow around 2% per year, in

line with trend growth. The expansion of government consumption is revised downward,

especially for this year, consistent with the projections of the last Public Finances Report, in

response to the requirements of the structural balance target (Figure 10).

Our GFCF growth forecast for the period 2024-2026 is lowered some from June, due to weak
non-mining investment. For the mining industry, the central scenario ratifies the higher
investment momentum (Figure 11). This would have a positive impact on the activity of
other sectors, especially construction. About fundamentals, GFCF performance will benefit
from improving financing conditions and the appreciation of the real exchange rate (RER)
over the projection horizon, consistent with external financial conditions that will ease as

the Fed's interest rate cutting cycle progresses.

Our headline inflation forecast is raised in the short term, mainly due to the greater increase
in volatile components. A fraction of it responds to the direct and indirect effects on the CPI
of the sharper hike in electricity prices that occurred in June and July. Add to this the impact
of the increase in global shipment costs and the peso depreciation of recent months. At the

end of this year, headline inflation is expected to close at 4.5% (4.2% in June).

In the medium term, inflation will decline more rapidly than anticipated in June, given the
lower inflationary pressures coming from domestic demand. We estimate that it will
converge to the 3% target in the first months of 2026 and will remain nearby until the end

of the projection horizon (Figure 12).

The expected impulse that the Chilean economy will receive from abroad is similar to our
June projection. This considers no big change in our trading partners' growth compared to
the previous projection -of the order of 3% in the period 2024-2026-, somewhat more
favorable international financial conditions and slightly lower terms of trade. The copper
price is down somewhat from the previous estimate. For 2024, US$4.15 per pound is
projected (US$4.3 in June), while for 2025 and 2026 prices of around US$4.3 per pound are

still considered (Figure 13).

Monetary policy

As we reported in yesterday's monetary policy meeting statement, the overall available
background suggests limited changes in the outlook for activity, although spending is
weaker. This, together with inflation expectations in line with the 3% target, reduces the

risks of more persistent inflation in the medium term related to the cost shock.

Thus, we estimate that, if the assumptions of the central scenario of this IPoM come true, we
will reduce the MPR towards its neutral level at a somewhat faster pace than we thought in
June. This faster pace will factor in the evolution of the macroeconomic scenario and its

implications for the trajectory of inflation.

As always, there are scenarios where monetary policy could follow a path deviating from

the central scenario, which are reflected in the MPR corridor.

The lower border represents a situation where the weakness in activity and demand
observed in the second quarter is prolonged and/or deepened by different factors, including
a weaker labor market. This would have larger downward effects on inflationary pressures
than those contemplated in the central scenario, leading to a more rapid reduction to the

MPR.

The upper border represents the case of a rise in inflation that is more persistent than
expected or if its second-round effects exceed expectations, which could be accentuated by
the dynamism of mining investment and the additional impulse that this would have on the

activity of several sectors and demand.

There are also situations where the evolution of the international scenario deviates from the
central scenario. In particular, the speed at which the Fed will reduce its interest rate would
affect global financial conditions, with impacts on the local economy, but would keep the

MPR within the borders of the corridor (Figure 14).

The main risks - which relate to scenarios that are unlikely to occur but would have a more
significant impact on the economy - are linked to the external environment, where the
probability of negative geopolitical and financial scenarios has increased. The global

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geopolitical situation has worsened on the different tension fronts and the episodes of risk
aversion in the financial markets, although temporary, have been pronounced. This has
increased the likelihood of contractionary and inflationary scenarios in the short term, in a
context where global cost pressures have intensified. The fragility of the fiscal positions of
several developed countries, especially the United States, is also a focus where risk needs to

be monitored.
Concluding thoughts

Dear senators, I would like to end this presentation with some reflections on the economic
scenario we have been facing and the challenges that lie ahead. This is my third presentation
as the Governor of the Central Bank of Chile before this plenary. In each one of them, I have
had the task of describing different realities, giving an account of the various challenges of
recent years. Two years ago, we were dealing with an inflationary shock that had not been
seen in decades. The Bank reacted swiftly to bring inflation back to its target and prevent
the population from being even more severely affected by the fast and sustained price
increases. A year ago, inflation had fallen sharply from those peaks and the Central Bank

was already in the process of easing the contractionary stance of monetary policy.

This presentation finds us in a better position. After significant efforts, our economy has
restored its macroeconomic balances. Monetary policy has done its job. Inflation is much
closer to 3%, and although it will rise in the short term, this will be related to transitory
factors, which we are constantly monitoring, of course. It is important to point out that the
above-mentioned achievements make it possible to contain a shock of this nature within the

policy horizon without a great effort on the part of monetary policy.

The monetary policy rate has been consistently lowered. Compared to its peak, today it is
575 basis points lower, closer to its neutral level and in a process that, if current conditions
don't change, will continue to bring it closer to those values. This decrease should continue
to be passed through to consumer and commercial lending rates, thus improving the
conditions for households and companies to access credit. This factor will support

consumption and investment.

Activity and spending have also walked their own path during this period. The massive
overspending following the boost of pension fund withdrawals and universal transfers has
faded, as these resources were consumed, and monetary and fiscal policy strove to
reestablish equilibrium. Thus, we went through a period of contraction, natural and
necessary after the unsustainable expansion of the period before. For the last few quarters,
we have been on a different path. One that is leading us towards growth rates consistent

with the trend.

As we have mentioned on previous occasions, the pace at which the economy is adjusting
is not the same across economic sectors or spending components. Some sectors continue to
lag, others have grown faster. On the demand side, after the second quarter's setback, we
project that consumption will return to a trajectory more consistent with trend growth. On
the other hand, investment has been weaker, particularly in non-mining sectors.
Undoubtedly, this weak investment is an important factor to watch, inasmuch as it

influences future growth.

Here I would like to pause on one point: although inflation will rise towards the end of the
year and into 2025, this will be transitory and, if the projected scenario occurs, it will
converge to the 3% target at the beginning of 2026. Along with this, the economy this year
and the following years will be growing around trend output. As I said, with certain
heterogeneities. In this way, monetary policy and the framework we are working with have
succeeded in overcoming this complex challenge. As I said a moment ago, monetary policy

has done its job.

In any case, once the equilibriums have been restored and the economy is moving towards
its trend, we find ourselves face to face with the limit to our capacity to grow. As I just
showed you, the Central Bank regularly updates its medium-term growth estimate. Our

estimate for this variable is just under 2%.

A year ago, and based on a similar exercise, we looked up and asked the country if this
growth would be sufficient. I believe there is an important consensus in that the answer is

no, at least that is how we perceived it from this Senate in our last presentation. Growing at

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the medium-term rates that we are projecting does not allow us to meet our needs and

aspirations, so this is something we must take responsibility for.

Facing this challenge and surmounting it requires well-designed public policies, creativity
and effort from both the private and public sectors. It requires solid institutions. There are
no easy or quick solutions. These issues must be addressed with a view in the medium and

long term, but with a short-term effort that must be significant and persistent.

The good news is that everything indicates that we have opportunities, which require timely
preparation. We face challenges from technological advances that require our capacity to
adapt. It is necessary to improve the quality of our education, allocate resources to projects
that will increase productivity, advance in initiatives that favor investment, promote
competition and the depth of financial markets, and, of course, capitalize on the advantages
that are available to us. For example, to quickly and effectively take advantage of the
opportunities offered by the energy and mobility transition, and to adapt smoothly to the

technological challenges and other innovations that the future holds in store.

To enhance our medium-term growth, we also need a stable economy. Therefore, we must
work together to leave behind some weaknesses or scars from the cycle that began in 2019-

2020. Long-term savings and market depth have suffered and will take years to recover.

The Central Bank of Chile also has a role to play, paving the way for both public and private
initiatives to develop in the best possible way. This involves fostering appropriate
macroeconomic conditions, such as inflation at its 3% target and mitigating business cycle

fluctuations.

It also means making further progress in initiatives that contribute to safeguard financial
stability. In December 2025, the implementation of Basel III will be completed, which will
result in our banking system having higher levels of solvency and resilience, and being in a
better position to face shocks and continue fulfilling its vital role in financial intermediation,
which is to provide financing to households and businesses. The recently approved

implementation of the Resilience Law also improves liquidity channels, offering greater

capacity to face shocks. In addition, we will continue to promote measures that contribute
pacity P

to the strength and robustness of market infrastructures.

Dear senators, as in any household, facing all these challenges, present and future, requires
that we have our house in order. That we strengthen our savings and that we have minimum
agreements on what our action plans will be. This will allow us to better face difficulties or
shocks in a complex global environment and generate good foundations to build our future.
As I mentioned, the Central Bank's contribution to this orderly house is to contribute to
macroeconomic stability. To this end, we must maintain low, stable inflation, and ensure
financial stability and the normal functioning of the payment system. This benefits every
Chilean man and woman, particularly those least fortunate, who are the most affected when
the economy presents imbalances or fails to achieve a growth path that is able to satisfy their

legitimate aspirations.

Thank you.

FIGURE 1

Gross domestic product Monthly economic activity (Imacec) (*)
(index 2018 = 100, deseasonalized series) (index 2018 = 100, deseasonalized series)

120 --Total GDP --Mining GDP --Non-mining GDP 130 . .
-- Manufacturing --Other goods --Trade --Services

115
120

110
110

105
100 100

95
90

90
80

85

80 Ff T T T T T T 70 + T T T T T T
18 19 20 21 22 23 24 18 19 20 21 22 23 24

(*) The Other goods series includes agriculture, livestock and forestry, no agriculture & livestock.
Source: Central Bank of Chile.

FIGURE 2
Private consumption Real wage bill (*)
(index 2018 = 100, deseasonalized series) (index 2018 = 100, deseasonalized series)
180 --Private consumption - Durable goods 110
-Non-durable goods - Services
160 105
100
140
95
120
90
100 85
80 80
60 + T T T T T T 75 + y T y T y
18 19 20 21 22 23 24 19 20 21 22 23 24

(*) Calculated using deseasonalized series of real labor cost index ICL, normal hours worked and employment.
Sources: Central Bank of Chile and National Statistics Institute (INE).

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FIGURE 3

GFCF by components Real investment according to microdata (1)
(index, 2018 = 100, deseasonalized series) (index, 2018 = 100, deseasonalized quarterly series)
130 -GFCF -C&OW -M&E 200 - Mining - Other (2)
120 180
110 160
100 140
90 120
80 100
70 + T T T T T T 80 + T T T T T
18 19 20 21 22 23 24 19 20 21 22 23 24

(1) These figures are a proxy for investment data based on high-frequency information subject to revisions; they do not necessarily represent official National
Accounts figures. (2) "Other" does not include Energy.

Sources: Central Bank of Chile, Internal Revenue Service SII and National Customs Office. For details, see minutes of September 2024,
monetary policy meeting.

FIGURE 4
Headline and core inflation (1) (2) Monthly contributions to total CPI
(annual change, percent) (incidencias, puntos porcentuales)
20 - CPI - Core CPI H 2.0m Non volatiles foods tm Non-volatile goods excl. Foods
18 H ® Other volatiles ® Volatile energy
16 H 1 gm Volatile foods Services without volatiles
H ocr
14 i
12 i 1.0
10 i
8 i 0.5
6 H I
4 H 0.0 + : T T T . . 1
i =
2 H -0.5
Or T T ' tm-
2 ' "1.0
20 21 22 23 24 Jan.24 Feb.24 Mar.24 Apr.24 May.24 Jun.24  Jul.24

(1) Series consider the 2023 CPI reference basket with the splice made by the Central Bank of Chile. (2) Dashed vertical line marks statistical close of
June 2024 IPoM.
Sources: Central Bank of Chile and National Statistics Institute (INE).

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FIGURE 5

Annual inflation expectations implicit in inflation
insurances (1)

(percent)

10 -1 year

-2 years

Annual inflation expectations in

surveys (2)(3)
(percent)
10 -- EEE 1 year

----EEE 2 years

8 8

6 6

4 4

2 2

Of T T T T Of T T T T T T
Jul.19 Jul.20 - Jul.21 Jul.22 Jul.23 Jul.24 18 19 20 21 22 23 24

(1) Moving three-day averages. (2) Median responses