vittorio corbo : recent trends and perspectives for the chilean economy speech by mr vittorio corbo, governor of the central bank of chile, at the seminar “ business and economic vision 2007 - 2008 ”, organized by sofofa and universidad del desarrollo, santiago, 17 october 2007. * * * the insertion of the chilean economy into global markets has implied that its economic cycle has been determined by a mix of domestic macroeconomic policies, world economic events and by idiosyncratic conditions, such as recent energy supply shocks. in recent years, the prominent external environment for the chilean economy has been favorable. on the one hand, a rising demand and high prices of our exports, and on the other hand, low import prices of consumption and capital goods. in addition, firms have also faced favorable financing conditions. in this presentation i will start by discussing the outlook for the world economy. next, i will discuss recent trends in the chilean economy and, finally, some reflections on the conduct of monetary policy and the main risks we currently face. perspectives of the world economy the last five years have been the best five - year period in growth, inflation and financial conditions that the world economy has experienced in over 30 years. however, this scenario has been changing in the recent months. although the turmoils in global financial markets that started in july have been reduced by the determined actions taken by the central banks of industrial countries, especially the fed, risk aversion is still high, credit maturity has been reduced considerably and, except for prime firms, financial conditions have narrowed around the world. it is foreseen that turbulences in global financial markets will have effects on the perspectives of the world economic growth. in any case, this adjustment comes at a time in which most firms and the banking sector around the world are on solid footing, perhaps with the sole exception of some economies in eastern europe. the epicenter of this trembling is in the united states, which economy already was experiencing an important adjustment in its housing market, now expected to be more intense and extended as a result of the deterioration in the credit conditions that experiences its mortgage market. at the same time, the drop in us housing prices and the less favorable financial conditions faced by us consumers will affect the dynamism of private consumption. although the deterioration of financial conditions has no direct effect on prime firms, their economic perspectives have been negatively affected by lower dynamism expected for consumption and by more restrictive financial conditions faced by their

of chile and bloomberg. figure 15 mpr corridor ( * ) ( quarterly average, percent ) dec. 22 corridor fts ees sep, 22 corridor mpr 24. iv 24. iii 24. ii 24. i 23. iv 23. iii 23. ii 23. i 22. iv 22. iii 22. ii 22. i 21. iv 21. iii 21. ii 21. i forward ( * ) the corridor is built by following the methodology described in box v. 1 in march 2020 mp report and box v. 3 in march 2022 mp report. for dtails, see methodological note ( figure ii. 1 in chapter ii of december 2022 mp report ). source : central bank of chile. table 1 domestic scenario 2022 ( f ) sep. 22 mp dec. 22 mp report report 2023 ( f ) sep. 22 mp dec. 22 mp report report 2024 ( f ) sep. 22 mp dec. 22 mp report report ( annual change, percent ) gdp demanda interna domestic demand ( w / o inventory change ) gross fixed capital formation total consumption private consumption goods and services exports goods and services imports current account ( % of gdp ) gross national savings ( % of gdp ) nominal gfcf ( % of gdp ) 11. 7 21. 6 18. 0 17. 6 18. 2 20. 3 - 1. 5 31. 3 - 6. 6 18. 8 24. 0 1. 75 - 2. 25 1. 2 0. 9 - 3. 3 2. 2 1. 4 1. 3 - 1. 4 - 6. 3 18. 9 23. 5 ( f ) forecast. source : central bank of chile. 2. 4 2. 5 3. 2 2. 9 3. 3 2. 7 0. 9 1. 1 - 8. 7 17. 7 25. 6 - 1. 5 / - 0. 5 - 4. 7 - 4. 6 - 4. 7 - 4. 6 - 5. 7 5. 5 - 5. 5 - 3. 6 20. 0 22. 2 - 1. 75 / - 0. 75 - 5. 3 - 4. 6 - 5. 0 - 4. 5 - 5. 9 6. 0 - 5. 4 - 4. 9 20. 2 24. 3 2. 25 - 3. 25 2. 2 2. 6 2. 9 2. 4 2. 5 3. 0 1. 2 - 3