Sources: Central Bank of Chile and Transbank. 11  18  19  20  21  22  23  Figure 7  Unemployment and labor participation  Employment by occupational category  (percent)  (index, 2019-2023=100, deseasonalized series)  14  Unemployment rate  70  120  12  Labor participation rate (right axis) 65  110  10  60  Salaried  Other (*)  100 90 8  55  6  80  50 20  19  21  22  70  23  19  20  21  22  23  (*) Categories include employers, self employed, household help and unpaid family work. Sources: Central Bank of Chile and National Statistics Institute. Figure 8  Gross fixed capital formation (GFCF)  (index, 2013.I=100, real deseasonalized series)  120  GFCF  Construction & works  Machinery & equipment  110 100 90 80 70 13  14  15  16  17  18  Source: Central Bank of Chile. 12  19  20  21  22  23  Figure 9 IMCE (1)  EPN: Planned investments for the year (2)  (diffusion index)  100  75  (percent of firms responding "Yes")  Commerce  Construction  Manufacturing  IMCE w/o mining  60  40 50 20  25  0 18  19  20  21  22  0  23  Abr.21  Abr.22  Abr.23  (1) Monthly Business Confidence Index.
But this step-up should not ignite an acceleration in cost and price pressures, given the remaining slack in key factor and product markets. 10. Third, there are important upside risks to this baseline assessment of inflation. We have seen within this region, a recent increase in the upstream producer prices in China, which points to temporary frictional costs as well as some eﬀect from commodity prices, but also the possibilities of the early emergence of underlying cost-push pressures. Demand-pull price increases could pick up and rise to the fore in the latter part of the year if the growth recovery continues apace, and it could interact with the concurrent firming in short-run supply-side costs. Indeed, these risks take on a particular relevance at the current conjuncture, because the near-term trajectory for inflation represents one of the key uncertainties for financial markets. Markets may be particularly vulnerable to signs of accelerating inflation in the data, which could trigger some volatility in asset prices. 11. Fourth, the interaction of the cyclical dynamics with longer-term secular trends on prices is likely to reassert going forward. Before COVID-19, many countries faced persistently low price inflation, a trend driven by a complex mix of secular factors, such as technological progress, especially automation and digitisation, wage inequality, and demographic trends. All of these factors bring about important long-term relative price shi s in their wake. But post-COVID, their pass-through into a general increase in prices comes against another key set of filters.