identify cases and isolate the sick or potentially infected. second, chile has accumulated economic buffers over the years thanks to financial and fiscal responsibility policies, and sound institutions to apply them. thus, its space for fiscal, monetary, and financial policy making is also bigger than that of many countries. third, its social protection system, despite imperfections, has the means to swiftly reach the lower - income households and workers risking their continuity in their jobs. at the same time, however, we must recognize our weaknesses, such as an important fraction of informal jobs, struggling productive sectors, and high uncertainty due to the social crisis that broke out last october. the risk that the institutional framework cannot bring new episodes of violence under control is a big concern in the country. the strength of our economic policy framework has been reflected in chile ’ s rapid and forceful response to the spread of covid - 19 with measures to curtail and mitigate its economic impact. in the cbc, this has translated into more than ten measures adopted to boost the monetary stimulus, strengthen credit, and reduce financial volatility. this fact has been recognized by the markets so that, since the onset of the global alarm about the pandemic, in chile asset prices have fallen less than they have in other comparable economies. as central bank, we are actively working to ensure the full implementation and effect of the measures adopted. at the same time, we will be vigilant on how events unfold, ready to deploy all our instruments to support the economy. at this juncture, however, the actions of one institution alone will not do the job. in recent weeks we have been strengthening our coordination with the ministry of finance and the financial market commission, to align rules and incentives so that the funds flow to the most stressed businesses and households. the challenges we face require intensifying this coordination, including a response from the banking system to measure up to the circumstances, and cooperation of the national congress to speed up the legal reforms that require urgent implementation. although this emergency affects the day - to - day lives of many people, if we know how to manage it well, with good policies and collaboration of everyone involved, the impact will be temporary and, as the pandemic is controlled, we can all return to our activities as usual. this will allow the economy to recover its growth rate and leave the period of contraction behind. however, for this to happen, it is essential that those needing help to get through this shock obtain

installed capacity utilization has declined accordingly. domestic demand slowed down further in the second quarter. final demand, however, which excludes inventories, continued to grow at the same pace of the first quarter. gross fixed capital formation posted y - o - y expansion flat from the first quarter of this year, but below the figures of the second half of 2012. as has been noted before, this slowdown owes mainly to the maturing of mining investments after three years largely outperforming gdp. also in an external context where the copper price has dropped and moderating expectations for growth around the world but especially in china, which call for more caution when evaluating investment decisions. on the other hand, private consumption was more dynamic, especially in its non - durable component, while durables remained high. labor market conditions have continued to tighten, but are still the main driver of this component. nominal and real wages have moderated their annual variation, while the unemployment rate remains near all - time lows. again, unlike previous cycles, credit growth has accompanied private income, but has not been the main determinant of household spending. this last quarter saw a significant depletion of inventories, reversing the opposite trend seen in the first quarter of the year, due to, among other factors, the effects of the port strike. as forecast, cpi inflation has returned to the tolerance range, as the temporary factors that affected it have eased ( figure 3 ). in particular, the prices of electricity and gasoline rose, the former due to the end of price recalculations, the latter because of world prices and, to a lesser extent, the exchange rate depreciation. yet the core measure – cpiefe, which excludes foods and energy – has remained near 1 % annually, affected by the persistent bis central bankers ’ speeches negative incidence of the goods component. inflation expectations two years ahead remain close to 3 % annually. although the board has held the mpr constant, there have been variations in domestic interest rates and the real exchange rate that smooth the economy ’ s adjustment to a scenario of lower external impulse and less pressures on internal resources. market interest rates have dropped in the year so far. the real exchange rate ( rer ) has depreciated, approaching its average of the past 15 to 20 years, and is believed to be within the range consistent with its long - term fundamentals ( figure 4 ). the baseline scenario assumes that chile ’ s gdp will grow