percent ) ( annual change, percent ) - 2 - 2 cpi cpix cpix1 cpi minus foods and energy two years ahead one year ahead sources : central bank of chile and national statistics bureau ( ine ). figure 10 cpi monthly inflation ( percent ) 2. 0 2. 0 1. 5 1. 5 1. 0 1. 0 0. 5 0. 5 0. 0 0. 0 - 0. 5 - 0. 5 - 1. 0 - 1. 0 - 1. 5 - 1. 5 jan. feb. mar. apr. may 2001 - 2006 average jun. jul. aug. sep. oct. nov. dec. source : national statistics bureau ( ine ). table 3 inflation ( annual change, percent ) 2009 ( f ) 2010 ( f ) average cpi inflation december cpi inflation cpi inflation two years ahead ( * ) 3. 4 2. 6 4. 4 7. 8 8. 7 7. 1 2. 3 0. 6 1. 5 2. 3 average cpix inflation december cpix inflation cpix inflation two years ahead ( * ) 3. 2 2. 7 4. 0 6. 3 8. 4 8. 7 3. 7 0. 5 1. 1 2. 2 average cpix1 inflation december cpix1 inflation cpix1 inflation two years ahead ( * ) 2. 5 2. 4 4. 1 6. 3 7. 8 7. 9 3. 8 1. 0 1. 0 2. 2 2011 ( f ) 3. 0 2. 9 3. 0 ( f ) projection. ( * ) inflation projected for the second quarter of 2011. source : central bank of chile. table 4 main assumptions of the international baseline scenario ( yearly average ) 2009 ( f ) 2010 ( f ) sep. 08 nov. 08 jan. 09 may 09 sep. 08 nov. 08 jan. 09 may 09 wti oil price ( us $ / barrel ) lme copper price ( us $ cent / lb ) terms of trade ( annual change, % ) - 15. 0 - 7. 2 - 18. 2 - 19. 1 - 13. 5 - 4. 3 - 2. 5 - 2. 0 - 3. 8 external prices in us $ ( annual change, % ) 12. 0 3. 3 0. 5 - 0. 8 - 5. 7 2. 8 4. 8 5. 5 7. 0 ( f ) projection. source : central bank of chile. figure

quarters, and new stressful situations may arise that could worsen the already precarious situation of the world economy. meanwhile, if the rebound of stock markets and the reduced risk aversion are solid indications that uncertainty is fading out, a more widespread recovery of global output and demand may be seen in the short run at the global level. the materialization of some of these risks could have important implications on the domestic economy, mainly consumers and entrepreneurs ’ expectations possibly taking longer than predicted to improve, or the economy quickly recovering from its current state. aside from the risks inherent to the short - run performance of the economy, there are doubts regarding the medium - term effectiveness of the measures adopted to try to resolve the international crisis, the potential protectionist actions by governments and a possible deflation in developed economies that may delay decisions to consume and invest. global imbalances are still present, and there is also the risk of high global inflationary pressures in the medium term if the large fiscal and monetary stimulus packages in the developed world are not properly managed. domestically, we cannot rule out that, facing a relief in global uncertainty, the magnitude of the macroeconomic impulse under way, deriving from the combination of clearly expansionary fiscal and monetary policies, translates into a strong push to domestic output and demand. nor can we rule out that the measures taken by the government to smoothen the functioning of credit markets, to stimulate investment and to cushion the impact on the labor market of the cyclical situation, facilitate a faster response of the economy to said macroeconomic stimulus and a rapid recovery of expectations. final considerations i would like to end this presentation with some reflections about the economic situation we are going through and the prospects for our economy. the worsening of expectations and the higher uncertainty at the global level are grounded on the change in macroeconomic conditions. however, in our country this is clearly contained, thanks to the soundness of our economy, with strong macroeconomic fundamentals, and capable of implementing and sustaining policies that mitigate the impact from abroad. our financial system, unlike that of other countries, has suffered no dislocations compromising its solvency. inflation has rapidly been reduced, and medium - term expectations are consistent with the target. the board has reduced the mpr aggressively and does not rule out that further cuts may be necessary. accordingly, it reaffirms its commitment to conduct monetary policy so that projected inflation stands at 3 percent over the policy horizon. the worst part of