Figure 2  Activity gap by different methods (*)  Other gap metrics (*)  (percent)  6 4 2 0 -2 -4 -6 -8 -10 -12 -14 -16  (percent)  10.0  4.0  Capacity utilization Electric power generation (right axis)  3.0 2.0  5.0  1.0 0.0  0.0 -1.0  Range of models  -5.0  -2.0 -3.0  02  04  06  08  10  12  14  16  18  20  -10.0  22  -4.0 15  (*) For details on its calculation, see box II.1 in June 2023 MP Report. Source: Central Bank of Chile. 9  16  17  18  19  20  21  22  23  Figure 3  Commodity prices  (index, 2018-2023 average=100)  Real exchange rate (RER) (4)  4.0  122  3.5  115  3.0  108  2.5  101  2.0  94  1.5  87  (% of GDP, quarterly)  Foods (1)  180  Transportation costs (3) Oil (2)  140  100  60  20  (index, 1986 average=100)  19  20  21  22  23  Average of last 15 years  80  1.0 18  RER  18  19  20  21  22  23  10 11 12 13 14 15 16 17 18 19 20 21 22 23  (1) FAO food price index. (2) WTI-Brent average.
5  On this occasion, the Board considers that situations of this type are mainly of domestic origin. In particular, in the dynamics of inflation and its determinants. The upper bound is defined by events in which local inflation is more persistent than expected. In this aspect, the information provided by domestic expenditure and CPI prints will be key. The Board will evaluate the inflationary implications of these events, as they could mean that the process of reducing the MPR would be slower. Upward inflation surprises in developed economies could require higher international monetary policy rates, which would contribute to a depreciation of emerging currencies, the peso included. This would increase local inflation in the short term, although its impact on the MPR would be mitigated to the extent that it implies a greater contraction in activity and spending. The lower bound of the MPR corridor shows a scenario where the adjustment of the Chilean economy is faster than expected, leading to an earlier convergence of inflation. Different indicators of capacity gaps suggest that inflationary pressures have been gradually contained. A scenario where such gaps become more negative than expected would lead to a more accelerated reduction in the MPR. Such could be the case if a sharper deterioration occurs in the labor market and private consumption (figure 20). As for risks, these emanate mainly from the global macro-financial situation. A further deterioration could trigger episodes of high volatility, reduce liquidity and encourage capital outflows away from the emerging world.