the accumulation of a debt around six billion dollars with energy companies. law 21667, approved last april, establishes a mechanism for the normalization of prices and the repayment of the debt, considering subsidies for low - income households. as i said, our projections estimate an increase of 1. 45 percentage points in inflation by june 2025 as a result of this regularization of electricity prices. this considers the adjustments to generation, distribution and transmission charges, as well as the assumptions of the macroeconomic scenario such as, for example, regarding variables like the exchange rate and fuels. this effect is certainly an important one. from a monetary policy standpoint, our economy is now better equipped to deal with this shock. on the one hand, we have resolved the imbalances on the expenditure side, and with this, the more persistent inflationary pressures have been controlled. on the other hand, inflation expectations are anchored. this allows us to accommodate this supply shock within the policy horizon, without having to overreact with the rate. our monetary policy framework, being forward - looking, allows us to analyze the impacts of a price increase of this magnitude with several considerations in mind. for example, its origin and persistence. in essence, this increase in electric rates responds to a supply shock and not to an economic imbalance. therefore, we can accommodate this shock with a real interest rate that on average is no different from the one we expected in march and still ensure the convergence of inflation to the target within the two - year horizon. this is so because in the course of the first year of the policy horizon, inflation rises above our march estimate, to accumulate slightly more than one percentage point of higher inflation, while, in the central scenario, the nominal rate sees a softer decline than we expected in march. with this, the convergence of inflation to the 3 % target is achieved in the first half of 2026. however, we will evaluate this process step by step. this is a major shock, which sets in shortly after having gone through a significant inflationary cycle. the projections we present today consider second - round effects and inflationary persistence in line with historical patterns for both consumer and business behavior, as well as for the evolution of the other prices. it is important to point out that the way in which we are facing this shock is quite different from what we would be facing if it were a demand shock. if this had been the case, it would have had lasting impacts and would have

gfcf components continued to contract year on year ( figure 3 ). regarding inflation, the annual variation of total cpi remained at around 3. 5 %, while core cpi ( which excludes volatile items ) decreased from 4. 2 % to 3. 5 % between february and may 1 / ( figure 4 ). in cumulative terms, the latest monthly variations of both measurements have been in line with expectations, which corroborates that part of the high figures at the beginning of the year corresponded to one - off factors. by components of core inflation, the annual variation of the services component had a significant decrease with respect to the end of 2023 ( from 7 % in december to 5. 3 % in may ), reflecting the indexation to lower inflation rates in a season of the year that concentrates adjustments to past inflation. two - year inflation expectations remain at 3 %. bank lending interest rates have been decreasing according to the pass - through of the mpr cuts, attesting to the correct functioning of the monetary policy transmission mechanisms. bank credit still shows a moderate performance ( figure 5 ). this comes amid a demand that has continued weakening, particularly due to reduced interest in investment financing by firms, as reported by our latest bank 1 / for the purposes of macroeconomic analysis and monetary policy conduct, the board uses the 2023 - base series known as the benchmark cpi that considers data from the new basket only. for the purposes of inflation - correction contracts, liabilities, or indexed values, it uses the cpi change as informed by the national statistics institute ( ine ), which combines the 2018 - base cpi and the 2023 - base cpi. in may, the annual variation of this series was 4. 1 %. lending survey ( ecb ) and business perceptions report ( ipn ). according to these same sources, the supply conditions do not show changes in the margin, although they continue to be restrictive in some portfolios, a phenomenon influenced by factors such as a greater perception of risk on the part of banks, given the deterioration of default indicators. in any case, the behavior of commercial credit has been consistent with macroeconomic fundamentals, although it shows a certain deceleration that needs to be monitored. it should be noted that the shallower depth of the domestic capital market following the successive withdrawals of pension savings continues to affect the economy, especially because of its impact on the availability of longer - term local financing. in fact, long - term