. the impact of the depreciation on other prices in the cpi basket has been in line with expectations ; core inflation ( i. e., the cpiefe that excludes foodstuffs and energy ) has also risen, although at a slower pace than headline cpi. inflation expectations have remained at 3 percent in the projection horizon, with a slight increase in the near term. the baseline scenario assumes that y - o - y cpi inflation will rise temporarily to the 3. 5 to 4 percent range, in the coming months, reflecting the direct propagation of the peso depreciation to the prices of goods and services. the lower use of installed capacity – proxied by the behavior of output – should mitigate inflationary pressures and the direct effects of the depreciation. as i just said, the credibility and consolidation of our inflationtargeting scheme also help. therefore, already by the end of 2014 headline inflation should move closer to 3 percent, where it should stay until the end of the projection horizon, that is, the first quarter of 2016. core inflation will hover around 3 percent throughout the same horizon ( figure 7 ). bis central bankers ’ speeches the current account deficit of the balance of payments is forecast to stand at 3. 6 percent of gdp in 2014, up a little from 2013, but below the december estimate. behind it is the expected decline in the copper price this year, which more than offsets the lower growth foreseen in domestic demand and imports. this implies that, measured at trend prices, the deficit will narrow further, approaching 3 percent of gdp. as for gdp, the rate of total investment will go slightly above 23 percent in nominal terms ( somewhat more than 25 percent in real terms ), while national savings should amount to 19. 5 percent ( table 2 ). aside from the already discussed trajectories foreseen for domestic growth and the world economy, this forecast uses as a working assumption that nominal wages will be adjusted in line with productivity and the inflation target. it also uses as a methodological assumption that the real exchange rate will remain stable, considering that it is now inside the range believed to be consistent with its long - term fundamentals. finally, the baseline scenario uses as a working methodological assumption that the mpr will follow a trend comparable with the one that can be derived by the prices of financial assets prevailing at the statistical closing of this report ( figure 8 ). the baseline scenario reflects those events that are

well the choppy waters of the global financial crisis, and will continue to do so. but this is not the message that we seem to be absorbing as a nation. instead, it is one of a country lurching from one crisis to another. we seem to have a penchant for self - inflicted wounds, looking at our country from the glass is half empty perspective. i appeal to all of us to look at our economy from a glass half full point of view. this is actually not difficult to do. growth is consolidating, unemployment is low, public debt is very manageable and our citizens still enjoy a high standard of living. the central bank is absolutely committed to maintaining macroeconomic stability so firms can make longer - term decisions in an environment of confidence. by explaining the crosscurrents at work in our economy, our projections for what ’ s ahead, and our monetary policy response, we are doing our part to help mend business confidence. we are open to meeting with all business groups to better understand your needs and the support required. i am convinced that we have high calibre business leaders who are smart, professional and innovative. and who are totally committed to this country. you must be the change you want to see in trinidad and tobago. i thank you. bis central bankers ’ speeches