rosanna costa : opening address - iv meeting of heads of financial risk management in central banks opening address by ms rosanna costa, governor of the central bank of chile, at the iv meeting of heads of financial risk management in central banks, santiago de chile, 26 april 2023. * * * good morning, i would like to extend a warm welcome to all participants at this fourth meeting of heads of financial risk management in central banks organized jointly by the center for latin american monetary studies, cemla and the banco central de costa rica, banco de espana, banco de mexico and banco central de chile. this initiative, whose first version was launched in 2020, has been consolidated as a forum for analysis and reflection to analyze current and emerging challenges of financial - risk management at central banks. throughout these meetings, topics related to the governance of risk management and financial risks have been addressed from different perspectives, in a context strongly dominated by the challenges that the covid19 pandemic has posed. every organization is subject to numerous contingencies that may hinder or prevent the normal fulfillment of its functions. in particular, institutions such as central banks, whose mandate has important effects on the economy and social welfare, must also consider not only their own risks when making decisions, but also broader risks in the financial sector and the macroeconomy in general. risk management aims precisely at identifying potential contingencies, appraising them and adopting adequate preventive measures to avoid their materialization as much as possible, as well as having in place timely response plans to correct or mitigate the impact of such contingencies as they occur. our experience at the central bank of chile at the central bank of chile, we are in constant search for improvements in integral risk management, understanding that it adds value to business processes by helping to prevent, among other things, interruptions in operations and damage to reputation. for risk management, we have a corporate governance structure headed by the board, senior management, a committee of independent experts ( the audit and compliance committee ) and the risk committee, which promotes the framework for the management of risks that may affect the bank's ability to achieve its mission, its vision and its strategic objectives. while risk - oriented functions had been in place for quite some time, in 2019 the bank created a unit to cover strategic, financial and non - financial risks ( corporate risk ). issues that have been addressed since then include comprehensive and consolidated 1 / 3 bis - central bankers'speeches

decisively influenced by higher investment in non - mining and non - housing investment ( mainly machinery and equipment ). this, because the former is expected to regain its positive numbers during 2018 and the latter to continue to adjust for a few more quarters, after the boom triggered by amendments to vat payment regulations in the sector. as a percentage of gdp, in 2017 gfcf will reach 21. 7 % and 22. 5 % in real and nominal terms, respectively. on the consumption side, no major changes are expected in annual growth, and it is foreseen that it will continue to sustain domestic output and expenditure. our baseline scenario assumes that consumption will grow at a pace of 2. 5 % and 3 % this and next year, quite like 2016. it also assumes that export volume will grow a little over 1. 5 % this year, and the rate will double in 2018. behind this increase is an improved external scenario, which i will discuss in a moment. in this context, the current account deficit will be smaller than projected in december, and 2017 will be better than 2016, due to slower growth in domestic demand and improved terms of trade ( table 1 ). as i said earlier, the greater growth expected in 2018 originates in the economy having no major imbalances, the end of some factors that have hindered growth in recent years — for example, the four - year plunge of mining investment — an expansionary monetary policy stance and a stronger impulse from abroad compared with previous years. as for fiscal policy, it is assumed that the consolidation announced by the administration will proceed further. the recovery that reflects in the annual figures projected for 2018 should begin during the course of this year, considering the negative impact of the debilitated economic activity at the end of 2016 and early 2017. in fact, the average annual gdp growth of the last quarter of 2016 and the first of this year is somewhat above 0 %. already for the second quarter, in our baseline scenario, it will rise above 1. 5 % annually, which, on average, will be sustained and increased in the second half of the year. however, as we will see later, this scenario relies partly on a stronger monetary policy bias, which is necessary for the inflation target to be met. internationally, in the last few months a somewhat more favorable scenario has been forming. on the one hand, activity and expectations indicators in the developed world have revealed a better economic environment. particularly noteworthy is the situation of the manufacturing