Figure 6 Loans by type of credit (1)  Lending interest rates (3)  (annual change, percent)  (percent)  30  30  50  50  20  20  40  40  10  10  30  30  0  0  20  20  -10  -10  10  10  -20  -20  0  0  98 00 02 04 06 08 10 Consumer Corporate (2)  Housing  02  04  06  08  Consumer, from 181 days to 1 year  10  Consumer, over 3 years (4)  Commercial, 30-89 days (4)  Commercial, from 181 days to 1 year (4) Housing, over 3 years (5)  (1) Data for May 2010 are provisional. (2) Sum of commercial and foreign trade loans. (3) Weighted averaged rates of all operations performed in the month. (4) Nominal rates. (5) UF-indexed rates. Sources: Central Bank of Chile and Superintendence of Banks & Financial Institutions.
Frankly, I understand that the general public is not familiar with concepts like overheating or positive output gap, but I believe that annual growth rates to the tune of 20% for retail sales and in excess of 10% for wages are more than self-explanatory. Still, with all the obvious signs – even for non-economists – that the economy is growing fast, we are criticised for not fighting deflation. The recent experience has made us painfully aware that – despite the large amount of information provided through a wide range of communication vehicles – our messages get through to a much lesser extent than we had thought. Therefore, we should enhance our efforts in escaping the professional jargon and trying to be as accessible as possible when explaining to the public the rationale behind our monetary policy decisions. If I were to conclude on Romania’s experience with inflation targeting, I would say that it worked quite well, even though the concept of inflation targeting has not been immune to criticism, especially in the post-crisis period. I would mention here Axel Weber, who suggested in 2015 that inflation targeting is a simplistic framework that could not stabilise the value of money in a complex and constantly evolving economic environment. However, his opinion is not shared by other well-known economists.