especially in the north of the country and in some specific sectors. for this year, we estimate that gdp will grow in the range between 3. 25 % and 4 %, which compares with the 3 % to 4 % expected in march. this combines the actual activity data known so far with annual rates of change for the second half of the year that are lower than those of the first half, reflecting a higher comparison base for the same period of 2017 and the aforementioned moderation in the pace of growth in final domestic demand. beyond this year ’ s forecast, our view on the evolution of growth in the 2018 - 2020 period and our assessment of capacity gaps in the economy has not changed much. for 2019 and 2020, the projected ranges are unchanged. thus, we continue to expect that in 2019 the economy will grow between 3. 25 % and 4. 25 %, and between 3 % and 4 % in 2020 ( figure 4 ). we continue to estimate that the economic recovery is grounded on a favorable external scenario, a clearly expansionary monetary policy, the completion of the adjustment of mining and housing investment and the absence of important macroeconomic imbalances. as a working assumption, we assume that in 2018 the economy will receive a fiscal impulse consistent with the current budget, including the adjustments announced by the administration. going forward, we assume that expenditure will follow the path of gradual fiscal consolidation defined in the fiscal policy decree just issued by the authority. with these figures, on average our economy will grow above potential in the period 2018 - 2020, closing the activity gap during the policy horizon, as we projected in the march report. also, our estimate for the economy ’ s potential growth continues to lie between 2. 5 % and 3 % and it will gradually approach trend growth — between 3 % and 3. 5 % — to the extent that the rate of investment recovers, short - term constraints disappear, and resources are reallocated to more productive activities. come september, as has been the case for some years, we will reassess these estimates. the projected evolution of activity considers an external impulse slightly lower than that estimated in march, due to less favorable financial conditions and lower terms of trade associated to the oil price hike. activity and inflation data of recent months have consolidated the differences between the cyclical position of the united states and the other developed economies. thus, while in the united states there seem to be no gaps and incoming data on prices and wages show more clear inflationary pressures

contrasts with prices of 63, 59 and 56 dollars that were considered for the same years last march. as for copper, the average price estimates for 2018, 2019 and 2020 are practically unchanged at 310, 295 and 285 cents of dollar per pound, respectively. towards the statistical closure, the price of the metal climbed to about 330 cents per pound and, according to market reports, has been affected by the uncertainty surrounding possible labor - related downtime in some mines. in the baseline scenario, this increase is assumed to be temporary, so it does not modify the average price projections. should a mine paralyze, it could be necessary to review both the projected copper price and other macroeconomic variables for chile. the prices of oil and copper combined, plus those of other chilean exports, determine a less favorable trajectory of the terms of trade in the policy horizon. thus, between 2018 and 2020, the terms of trade will accumulate a decrease of the order of 3 % compared to a fall of 2 % estimated in march ( figure 10 ). on the side of inflation in chile, the annual variation of the cpi and the cpi excluding food and energy ( cpiefe ) levels remains around or slightly below 2 %, without showing significant differences than expected in march. as has been the trend of recent quarters, cpiefe inflation has been dominated by the evolution of the exchange rate, the persistent capacity gaps in the economy and the indexation of some prices to lower inflation rates ( figure 11 ). in the baseline scenario, we continue to expect cpiefe inflation to have a slow convergence to 3 % – not very different from what we expected in march –, while for headline inflation we foresee it reaching 3 % sooner than we thought then. in the former case, this is consistent with an economy that, beyond recent data, will close its capacity gaps over the next two years, and with a real exchange rate that, as i said, will return to near its historical average during the policy horizon. for headline inflation, its faster achieveent of 3 % is explained by the increase in fuel prices measured in pesos ( figure 12 ). regarding monetary policy, the board estimates that the monetary stimulus will remain as it is and will begin to be reduced as macroeconomic conditions continue to drive the convergence of inflation to 3 %. as a working assumption for the monetary policy rate, for the short term we assume a trajectory similar to that shown in the financial brokers survey available at the close of this report. for the