moderating the current economic dynamism and stabilize it near the growth rate trend, contributing at the same time to help inflation stand at three percent over the projection horizon. but the risks are still there. so let me describe the factors that shape our baseline scenario and the risks that might affect it. macroeconomic scenario headline inflation is still around three percent annually, while core measures, although on an upward trend, continue to be contained, both below march ’ s forecasts ( figure 1 ). the most outstanding development of the past several months has been the attenuation of some of the bis central bankers ’ speeches inflationary risks then identified. international commodity prices ceased to increase and the propagation of specific price shocks has been limited. this and monetary policy decisions have collaborated to ease fears of a further inflationary acceleration that we felt in march. accordingly, private inflation expectations show a decline in the last two months, although some remain above the target ( figure 2 ). first - quarter data showed a fast expansion of domestic output and demand, exceeding march ’ s expectations. partial indicators for the second quarter reflect an economy that continues to grow strongly but shows some recent moderation. worth noting is the strong dynamism of private consumption and, to a lesser extent, the machinery and equipment component of investment. consumption evolves in line with fundamentals, particularly the increase in household income, given that both employment and wages continue on the rise. financial conditions are still favorable. the baseline scenario assumes that gdp will grow this year between 6 percent and 7 percent. this range is higher than foreseen in march, consistently with the upward bias then identified. this higher growth forecast is based on actual first - quarter figures that exceeded estimates. for the rest of the year, the pace of expansion of demand will moderate as forecast in march. in particular, the speed of growth in the gdp of sectors other than natural resources will quickly approach the trend rate, which is still estimated at five percent. this scenario assumes that, on average, output gaps will remain closed throughout the projection horizon. on the demand side, the stronger growth during the first quarter obeyed primarily to the acceleration of private consumption. the baseline scenario assumes that in 2011 this expenditure component will grow more than forecast in march, although with a slowdown in durable consumption. this latter component has shown some early signs of moderating, as can be inferred from the behavior of car sales, among other factors. overall, the expected expansion of consumption will have

9 8. 3 7. 1 11. 0 1. 6 1. 9 0. 0 2012 ( f ) ipom ipom jun. mar. cf may. current account ( percent of gdp ) ( f ) forecast. source : central bank of chile. table 2 world growth ( annual change, percent ) average 00 - 08 ( e ) 2011 ( f ) ipom ipom jun. mar. cf may. world at ppp world at market exchange rate 4. 0 3. 1 - 0. 6 - 2. 1 4. 9 3. 8 4. 1 3. 0 4. 1 3. 2 4. 2 3. 3 4. 4 3. 7 4. 5 3. 8 4. 6 3. 9 united states eurozone japan china rest of asia latin america ( excluding chile ) 2. 3 2. 0 1. 4 10. 4 4. 9 3. 6 - 2. 6 - 4. 1 - 6. 3 9. 2 0. 1 - 2. 0 2. 9 1. 7 4. 0 10. 3 7. 7 6. 4 3. 0 1. 3 0. 8 8. 9 4. 5 4. 2 2. 7 1. 7 - 0. 6 8. 9 4. 8 4. 2 2. 7 1. 7 0. 0 9. 3 5. 0 4. 4 3. 2 1. 5 2. 3 8. 7 5. 0 4. 2 3. 2 1. 5 3. 1 8. 6 4. 9 4. 3 3. 2 1. 7 2. 8 8. 9 5. 2 4. 3 commodity exporters trading partners 2. 9 3. 5 - 1. 0 - 0. 3 2. 9 5. 9 2. 6 4. 4 2. 7 4. 3 2. 7 4. 6 3. 0 4. 6 3. 0 4. 7 3. 2 4. 9 ( e ) estimate. ( f ) forecast. sources : central bank of chile based on a sample of investment banks, consensus forecasts, the imf. and statistics bureaus of respective countries. bis central bankers ’ speeches figure 3 commodity prices ( 1 ) ( index, may 2010 - june 2011 = 100 ) ( monthly index, 2006 = 100 ) 140 250 jun. 10 oct. 10 feb. 11 feb. 11 jun. 11 jun. 11 jun. 10 oct. 10 energy metals 06 07 08 09 10 11 11 (