The investment to GDP ratio will fall from its nearly 30% level of 2008, to 26% in 2010, both figures in prices of 2003. Private consumption has been the component of domestic demand least affected by the crisis, and is expected to close 2009 with a slight increase driven by non-durable consumption. Consumer expectations have turned optimistic in the latest data, after two and a half years in the pessimistic zone. The not so restrictive financial conditions have also helped consumption and, most specially, its prospects. The Banking Credit Survey of the third quarter showed that more banks have eased their lending conditions, while at the same time demand for banking credit has increased from the previous quarter. The increase of household debt recovered slightly, particularly for consumer borrowing. The ratio between total household debt and disposable income fell in the last two quarters, as did the ratio between the financial burden (principal and interests) and disposable income. This latter decline obeys to both a fall in borrowed amounts and lower interest rates (figure 10). As underscored in our Financial Stability Report, these BIS Review 9/2010  3  adjustments are welcome from a financial stability perspective, because of the higher risk of redundancy faced by households this year. Given the lags between the recovery of output and employment, both households and lenders must continue to be cautious for some time. The performance of the labor market also supports the prospects for consumption. Latest data show that the decline has stopped.
Latin America: Brazil, Colombia, Mexico and Peru; Emerging Europe: Bulgary, Czeck Republic, Hungary, Poland, Russia, Turkey and Ukraine; Emerging Asia: India, Indonesia, Malaysia, Pakistan, Philippines, Taiwan, Thailand and Vietnam; Commodity exporters: Australia, Canada and New Zealand. Source: Central Bank of Chile based on CEIC Data. 16  BIS Review 9/2010