If any of these risks comes true, it is quite possible that the reaction of the exchange rate will push inflation up in the short term, although its medium-term effects are less obvious, considering that activity will probably suffer too. At home, inflation has remained high for quite some time, which could affect the velocity of its convergence, because of both its effects through indexation and the formation of expectations. All in a context where margins are still bounded and capacity gaps are small. Meanwhile, the drop in the oil price and the reduced external inflation might take some steam off inflationary pressures. Into the medium term, there are risks that could result in activity performing worse than assumed in our baseline scenario, widening capacity gaps and easing inflationary pressures. On one hand, although the labor market has remained resilient, a significant adjustment that may slow down wage growth, increase unemployment and affect expenditure cannot be ruled out. Confidence may not recover as expected, driving the economy to grow less. In any case, we do not rule out either that the economy could grow more than forecast, if confidence indicators recover more rapidly. This could also occur if the drop in fuel prices has a greater impact on our national income. After assessing these risks, we estimate that the balance of risks is unbiased for inflation and downward biased for output. Now let me turn to our Financial Stability Report (IEF).
Figure8 Real MPR (*) (9ercent) 8  Brazil  6  8 6  Indonesia  4 2 South Africa  0  Mexico  New Zealand  Colombia  4  Peru 2 0  Chile -2  Australia  -2  (*) Calculated as the current MPR minus inflation expected at December 2016. Sources: Central Bank of Chile and central banks of respective countries. 12  BIS central bankers’ speeches  Figure 9 Total corporate debt (*) (percent of GDP) 125  125  External Debt  Local Debt  100  100  75  75  50  50  25  25  0  09  10  11  13  12  14  15  0  III  (*) Excludes banks. Based on firm-level administrative information. Source: Central Bank of Chile based on Achef, SBIF and SVS data. Figure 10 Corporate financial indicators (1) (percent; times) 12  0,8 Indebtedness (right axis) (3)  9  0,6  6  0,4 Profitability (2)  3  0,2  0  0,0 95  97  99  01  03  05  07  09  11  13  15  (1) Data at December of each year, except 2015 which uses information up to September. (2) Accumulated profits in twelve months before financial expenses plus taxes over total assets. (3) Debt to equity ratio. Source: Central Bank of Chile based on SVS data.