17  Table 1  International scenario  2023 (f)  2024 (f)  Dec.22 MP Mar.23 MP Dec.22 MP Mar.23 MP Report Report Report Report  2021  2022  Terms of trade Trading partners' GDP World GDP at PPP Developed economies' GDP at PPP Emerging economies' GDP at PPP  11.9 6.6 6.5 5.2 6.6  -7.7 2.8 3.3 2.7 3.7  -1.1 2.1 1.9 -0.1 3.1  LME copper price $ WTI-Brent average oil price $  423 69  400 97  355 81  2025 (f) Mar.23 MP Report  (annual change, percent) 2.3 2.4 2.1 0.3 3.2 (level) 385 73  0.4 2.7 2.8 1.3 3.7  -1.6 2.3 2.2 0.3 3.3  -2.2 3.0 3.1 1.8 3.9  345 76  365 70  350 67  (f) Forecast. Source: Central Bank of Chile. Figure 11  Inflation forecast (*)  (annual change, percent)  CPI  14  Core CPI  CPI forecast  Core CPI forecast  12 10 8 6 4 2 0 19  20  21  22  23  24  (*) As from the first quarter of 2023, slashed lines shows forecast in March 2023 MP Report. Sources: Central Bank of Chile and National Statistics Institute.
Commodity exports play a particularly important role in several of the countries that were the first to introduce inflation targeting. The objective of monetary policy is to safeguard the value of money in the long term, and seek to contribute to stabilising economic developments in the short and medium term. The most important contribution monetary policy can make to sound economic developments in the long term is low and stable inflation. The inflation target provides an anchor for economic agents’ expectations concerning future inflation. We have a very open economy with free capital movements. Stable inflation expectations also contribute to more stable krone exchange rate expectations. Inflation targeting means setting the interest rate so as to achieve a numerical target for inflation. Norges Bank sets the interest rate with a view to stabilising inflation at 2.5 per cent within a reasonable time horizon, normally 1-3 years. The more precise horizon will depend on disturbances to which the economy is exposed, and how they affect the path for inflation and output. The inflation target represents a framework for, not an obstacle to, monetary policy’s contribution to stabilising output and employment. We have chosen flexible inflation targeting, i.e. variability in output and employment as well as in inflation is given weight. The objective of monetary policy is low and stable inflation. The instrument is the interest rate. The interest rate influences inflation with a lag and with varying intensity. As interest rates fall, household and local government consumption and investment tend to pick up.