Chile: Macroeconomic Outlook (and Tremors) Rodrigo Valdés Central Bank of Chile.
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Transcript of Chile: Macroeconomic Outlook (and Tremors) Rodrigo Valdés Central Bank of Chile.
Chile: Macroeconomic Chile: Macroeconomic Outlook (and Tremors)Outlook (and Tremors)
Rodrigo ValdésRodrigo ValdésCentral Bank of ChileCentral Bank of Chile
AgendaAgenda
• External conditions: A double dip earthquake
• Policy response– Fiscal policy: Structural surplus rule– Monetary policy in an inflation targeting
framework and free float
• Results and further issues– Policy traction (effectiveness)– Maneuvering space
External ConditionsExternal Conditions
Terms of TradeTerms of Trade(Index 1996=100)(Index 1996=100)
Sept.
avg. 1990-1997
May
8888
9191
9494
9797
100100
103103
106106
9898 9999 0000 0101 0202 0303 0404
Chilean Sovereign SpreadsChilean Sovereign Spreads(basis points)(basis points)
EMBI
Chile 2009 Chile 2012
8080
100100
120120
140140
160160
180180
200200
220220
240240
Jul. 99Jul. 99 0000 0101 0202500500
600600
700700
800800
900900
10001000
11001100
12001200
(Chile)(Chile) (EMBI)(EMBI)
Net Capital InflowsNet Capital Inflows( % of GDP, four quarter moving average)( % of GDP, four quarter moving average)
-2-2
00
22
44
66
88
1010
9797 IIIIII 9898 IIIIII 9999 IIIIII 0000 IIIIII 0101 IIIIII 0202 III (p)III (p)
Policy ResponsePolicy Response
Central Government Fiscal SurplusCentral Government Fiscal Surplus(% of GDP)(% of GDP)
Official
-3-3
-2-2
-1-1
00
11
22
33
9696 9797 9898 9999 0000 0101 0202
W/O CSFPrivatiz.
Consolidated Public DebtConsolidated Public Debt(% of GDP)(% of GDP)
Gross
00
1100
2200
3300
4400
5500
8989 9090 9191 9292 9393 9494 9595 9696 9797 9898 9999 0000 0101 0202(June)(June)
3030
4040
5050
6060
7070
8080
Net
(Net)(Net) (Gross)(Gross)
Chile: Inflation and TargetsChile: Inflation and Targets(annual %)(annual %)
00
55
1010
1515
2020
2525
3030
3535
90 90 91 91 92 92 93 93 94 94 95 95 96 96 97 97 98 98 99 99 0000 0101 0202
Private Sector Expected Inflation Private Sector Expected Inflation (%)(%)
PRBC-360
one-year TAB1,01,0
1,51,5
2,02,0
2,52,5
3,03,0
3,53,5
4,04,0
4,54,5
5,05,0
0101 Feb.Feb. Apr.Apr. Jun.Jun. Aug.Aug. Oct.Oct. Dec.Dec. Jun.Jun. Oct.Oct.
survey
Short-Term External Debt and FX Short-Term External Debt and FX ReservesReserves(Debt/Reserves ratio, %)(Debt/Reserves ratio, %)
00
10102020
3030
40405050
6060
70708080
9090
9090 9191 9292 9393 9494 9595 9696 9797 9898 9999 0000 0101 0202(Sep.)(Sep.)
Financial System IndicatorsFinancial System Indicators(%)(%)
Non-Perf. Loans Profitability Basel Index
Dec.'00 1.73 12.7 13.34June '01 1.84 18.7 12.92Sept. 1.82 18.4 12.86Dec. 1.62 17.7 12.73
Mar. '02 1.74 16.9 13.71June 1.78 16.8 13.42July 1.81 17.1 13.44Aug. 1.82 17.1 13.58Sept. 1.86 16.6 n.a.
MPR and Central Bank Bonds MPR and Central Bank Bonds Interest Rates Interest Rates (%)(%)
(mpr, pdbc)(mpr, pdbc) (prc)(prc)
PRC-20
PRC-8PDBC-30
PDBC-90MPR
22
33
44
55
66
77
88
99
Aug-01Aug-01 Oct-01Oct-01 Dec-01Dec-01 Feb-02Feb-02 Apr-02Apr-02 Jun-02Jun-02 Aug-02Aug-02 Oct-02Oct-0200
11
22
33
44
55
66
77
Real and Nominal Exchange RateReal and Nominal Exchange Rate (index, 1996=100, w/r to G-5)(index, 1996=100, w/r to G-5)
NER-5
RER-5
8080
9090
100100
110110
120120
130130
140140
150150
160160
9696 9797 9898 9999 0000 0101 0202
Results and Further IssuesResults and Further Issues
GDP and Domestic Demand Real GDP and Domestic Demand Real GrowthGrowth(%, four quarters moving average)(%, four quarters moving average)
GDP
Demand-12-12
-9-9
-6-6
-3-3
00
33
66
99
1212
9797 IIIIII 9898 IIIIII 9999 IIIIII 0000 IIIIII 0101 IIIIII 0202 IIIIII
Further IssuesFurther Issues
• Policy traction (effectiveness) has been lower than expected– Political pressure for “more”– Questions regarding the value of credibility rewards– Anyway, what is the benchmark? (crisis vs downturn)
• Maneuvering space: bounded– Fiscal rule may collide with market expectations– FX market required the announcement of
intervention
Chile: Macroeconomic Chile: Macroeconomic Outlook (and Tremors)Outlook (and Tremors)
Rodrigo ValdésRodrigo ValdésCentral Bank of ChileCentral Bank of Chile