and 3. 25 %, a range that is somewhat lower than estimated in the last report bis central bankers ’ speeches ( table 3 ). this projection considers that the floods in the north of the country and one - time effects on important mines reduce the mining growth estimate, with a downward incidence on the estimate for annual gdp growth of one tenth of one point compared with the march forecast. meanwhile, since the partial data of recent months show weaker private expenditure, it is foreseen that the recovery that was expected for the second half will occur at a slower pace than was projected in march. the business perceptions report of last may confirmed bounded expectations regarding the performance of businesses and investments in 2015. moreover, the cbc ’ s survey continued to point to a fall in valued projects for this year compared with 2014 ( table 1 ). on the external front, our projection assumes trading partners ’ growth to drop by one tenth of a point in 2015 and 2016, to 3. 3 % and 3. 7 %, respectively. this adjustment responds largely to the reduced projection for the us. in the eurozone, prospects remain unchanged because first quarter data brought no surprises other than some differences within the region. growth is revised down for china and latin america, because of actual first - quarter data and weaker prospects. as for the terms of trade, our estimate continues to assume an improvement over 2014, although not as big as was expected before. in the baseline scenario, in 2015 and 2016 copper and oil are expected to trade at somewhat higher prices than we thought in march ( table 2 ). the chilean economy has made a major adjustment in recent quarters, improving its external position and laying the foundation for a recovery without imbalances. this projection assumes that monetary policy will remain significantly expansionary and that fiscal policy will continue to contribute to expenditure growth in accordance with the fiscal rule and with the objectives set by the administration. it also considers that the exchange rate depreciation accumulated since 2013 will continue to boost those tradable sectors that are more sensitive to the exchange rate. in addition, the price of fuels, which runs below the average of previous years, will continue to help reduce business costs and improve household income, even if its effects are smaller than expected a few months ago. as for inflation, in the baseline scenario the cpi should hover around 4 percent annually still for some months, and stabilize near 3 percent during 2016. the cpiefe is expected to post an annual variation of close to 3 percent in 2016

this framework combines bank - specific measures with macro prudential actions to contain potential systemic risk. in this respect, one of the new tools is the countercyclical capital buffer : an additional capital requirement that could be activated and deactivated by the central bank depending on the state of the financial cycle, and whose main goal is to preclude the incubation of systemic risks and increase the resilience of the system as a whole. still, there are a few challenges ahead that we need to address to have an even more robust financial system. in particular, two tasks seem more urgent than others. namely, resolution of financial institutions and deposit insurance. while the new banking law includes some provisions in this respect, by introducing stronger early - intervention measures, these need to be further based on agosin et al. ( 1999 ) and espinosa and fernandez ( 2015 ). page 4 of 5 central bank of chile march 2019 developed to provide a comprehensive framework to deal with banks in trouble or on the brink of insolvency. once the preparatory phase of the general banking law, including a unified supervisor, is fully completed, we hope that the central bank and the government can advance in drafting a legal proposal on these issues. certainly, these areas will be important points in the imf ’ s financial sector assessment program ( fsap ) update of 2020, and it is important that we get there with the job well advanced. acknowledgements finally, allow me to thank the presenters for sharing their interesting research insights here with us in santiago. i also thank the organizers from the central bank of chile and the iadb in putting together this rich agenda from which we will certainly distill conclusions to guide our work forward. in particular, i would like to thank alejandro jara, markus kirchner, andres fernandez, victoria nuguer, and liliana rojas - suarez for setting up the agenda, and to tomas gomez, paloma navarro and maria jose reyes for the excellent organization of the event. i wish everyone a very fruitful discussion and a pleasant stay in santiago. * * * references espinosa, c. and j. fernandez ( 2015 ). “ comparacion historica de resultados en el sector corporativo en chile ”. economia chilena, vol. 18, no. 1. agosin, m., g. crespi, and l. letelier ( 1999 ). " explanations for the