rodrigo vergara : the central bank of chile and the external crisis presentation by mr rodrigo vergara, governor of the central bank of chile, at a special session held by the honorable senate to “ analyze and evaluate the economic policy measures that have become indispensable to confront the severe symptoms of international recession and with the purpose of becoming familiar with the contingency plan announced by the supreme government ”, santiago de chile, 31 january 2012. * * * mr. president of the senate, senator guido girardi, honorable senators. thank you for your invitation to discuss the international economic situation and the measures that can be adopted in our country to address an external crisis. these instances are important for communicating the vision of the central bank of chile ( cbc ) on these issues. in the past several years, the advanced economies have gone through a severe crisis. the causes and consequences of the great recession of 2008 – 2009 have not yet been resolved and we are again enduring periods of external stress that put to the test the strength of our economy and its fundamentals. this forces us to carefully evaluate the current environment, its implications on the performance of our economy, and the measures we can implement if deemed necessary. during the past year, the biggest tensions have originated in the frail fiscal and financial conditions of some economies in the eurozone. this situation has persisted for a long time and no definitive solution is foreseen in the near term. progress has been made in several areas, but the problems ’ complexities and the political difficulties to deal with them are huge. this, coupled with the delicate position of consumers and firms, has translated in deteriorating economic expectations in the region, anticipating a recession during this year. the situation in the united states, while less severe than that in europe, is also complex, especially because of the slow recovery and little room for fiscal and monetary policies to stimulate the economy. the emerging world, chile included, will undergo a period of slower growth than in the past few years. market consensus forecasts, last week ’ s imf projections, and also those in our december 2011 ’ s monetary policy report point in the same direction ( table 1 ). most recently, the information coming from the u. s. shows a somewhat better performance than was forecast some weeks back, but does not modify medium - term problems and risks affecting its economy. in fact, last week the federal reserve extended from mid - 2013 to end - 2014 the period during which it would hold

years ( cbc ) capital goods imports and ipsa ( 1 ) ( billions of dollars ) ( thousands of dollars of 2013 ; million of dollars of 2013 ) real ipsa ( t + 7 ) capital goods imports and ipsa ( 1 ) 1, 700 1, 500 1, 300 1, 100 08 09 10 11 12 13 14 15 16 17 18 19 20 21 ii iii iv ii iii iv ii iii iv ( 1 ) quarterly moving averages. ( 2 ) series deflated by the capital goods import price index, with base year 2013 = 100. spliced with the base year 2008 = 100 series using annual changes. for second quarter, data for the first quarter of that year are repeated. ( 3 ) excludes other transport vehicles. ( 4 ) four - quarter moving average. for each version of the cbc survey, includes 5 - year forecasts, considering the current year. sources : central bank of chile, bloomberg, and capital goods corporation ( cbc ). figure 16 output gap ( 1 ) ( level, percentage points ) mar - 21 report jun - 21 report - 4 - 8 - 12 - 16 ( 1 ) historic estimates of the gap have changed because of recalculation of potential gdp. the forecast uses the multivariate filter, which factors in the new non - mining trend gdp ( 20212030 average : 2. 9 % ). ( 2 ) dotted lines show forecast. source : central bank of chile. page 22 of 27 figure 17 inflation forecast ( annual variation, percent ) cpi mp report jun. 21 core cpi ( * ) mp report jun. 21 forecast ( * ) measured by the cpi minus volatiles. sources : central bank of chile, national statistics institute ( ine ), and health ministry of chile. figure 18 total factor productivity ( tfp ) growth in chile ( * ) ( percent ) tfp 1997 - 2019 mean 2011 - 2019 mean - 1 - 2 - 3 ( * ) annual growth in tfp for non - mining gdp. for details, see the monetary policy meeting's minutes released together with this monetary policy report. source : central bank of chile. page 23 of 27 figure 19 mpr corridor ( * ) ( percent ) 4. 0 corridor fts 3. 5 confidence interval : 66 % ees confidence interval : 33 % forward 3. 0 2. 5 2. 0 1. 5 1. 0 0. 5 jun / 23 mar / 23 dec / 22 sep / 22 jun / 22 mar /