The range for this year has been upgraded from June, based on actual data above projections in the first half and more dynamic figures available for thirdquarter demand and output, which are foreseen to continue into the first half of 2011, prompting output gaps to close in this latter period (figure 7). For the year 2011 GDP is expected to grow by 5.5%–6.5%. Moderation of world growth towards 2011, the dissipation of one-time effects of the crisis and 27-F, plus the gradual withdrawal of monetary policy stimulus will result in both output and domestic demand slowing down by the second half of 2011. It is worth noting that y-o-y GDP growth figures in the second quarter of 2011 will be high due to the low basis for comparison associated to the earthquake. Similarly, once the swelling of domestic demand is finished, it should expand next year at a rate the half of the strong growth it should post this year. This will come accompanied with more dynamic export volume growth that will revert the tough 2009 and 2010 years, when exports were affected by the global recession and by the disruptive effects of the earthquake (table 2). The rebound of the Chilean economy is also apparent in a dynamic labor market, where employment is growing strongly and the rate of unemployment has dropped (figure 8).
Concluding remarks Let me finish with some short reflections. After several years of heavy turbulences and natural disasters, the Chilean economy is on a very good standing to continue on a path of sustained growth. Price stability has been preserved, preventing inflation from affecting the purchasing power of citizens, especially those with less income and thus less capability to protect themselves against this menace. Growth has consolidated, pushing the rate of job creation to levels we had not seen in years. The contribution of monetary policy to this good performance is unquestionable. It has been flexible enough to be able to be applied when facing sharp changes in the economic environment, with no unnecessary dogma or rigidities. In order for this process to continue over time it needs to be balanced and operate in the context of an inflation rate in line with the target. Otherwise it will become just an unsustainable acceleration calling for drastic adjustments with its related costs in lost output and employment. Evidently, as a country we continue to face challenges, particularly related to maintain sustainable growth rates for long periods and not create tensions on price stability. Guaranteeing low and stable inflation is the best contribution that the Central Bank of Chile can make to prosperity in this new century of independent life that is beginning for our Republic. Thank you.