On the other hand, neither can we rule out a strengthening of copper supply and demand factors that would allow prices to remain high for longer, according to some market analysts. Regarding domestic activity, we expect GDP to gradually regain faster growth. Several local factors pose risks to this projection. For now, the lack of synchrony between different expenditure components persists, with sectors (especially investment-related) that still lag behind in the recovery process. Lower than expected short-term dynamism could threaten the robustness and sustainability of the recovery of growth in the medium term. In particular, because the improvement in the consumer and business confidence indicators owes more to expectations of better conditions going forward than to the present situation, and because the financial market, within a generally favorable scenario, contains segments of greater vulnerability in consumer and commercial credit. In contrast, borrowing costs remain at record lows and international conditions have been better than we anticipated, which could add momentum to investment and speed up its recovery. In this context, the Board estimates that the risk balance for both activity and inflation is unbiased. However, it reiterates its intention to monitor any possible downward deviations of inflation in the short term that could jeopardize its convergence to the target within the forecast horizon. Accordingly, the Board reaffirms its commitment to conduct monetary policy with flexibility, so that projected inflation stands at 3% over the two-year horizon.
The Financial Stability Report In our FSR, we communicate every June and December the recent macroeconomic and financial developments that may influence the financial stability of the Chilean economy. As opposed to the MP Report, the FSR is not articulated around a baseline scenario, but rather focuses on the most significant risks threatening the financial system. In this FSR, we note that in the second half of this year the Chilean financial system has suffered no major disruptive events and the data at hand indicates that the sector continues in a strong enough position to withstand the impact of stressful scenarios. We also observe that the internal and external payment systems have worked normally, while the traditional credit risk indicators have remained low up to this moment. However, some alternative risk measures show increases in certain sectors. As we warned in the MP Report, if the local economy's slowdown of recent years is further prolonged, this situation could deepen. In the external scenario, as usual, the risks identified in the MP Report's baseline scenario that I just 7  presented are very similar to those considered in the FSR, particularly those relating to a sharp increase in external interest rates and their impact on our local financial conditions. The FSR notes that the good financial conditions abroad have been mirrored locally. Likewise, we emphasize that the cost of short-term bank financing has remained coherent with the MPR and that the cost of issuing long-term debt for companies and banks has been compressed lately.