The external scenario, beyond recent volatilities, continues to signal higher growth in the developed world, with favorable financial conditions for emerging markets and commodity prices without major changes, after having begun a recovering in late 2016. Thus, although important external and domestic sources of uncertainty remain, prospects for this year and next are in line with forecasts. Accordingly, the projections in the baseline scenario that I will be sharing with you in a moment, assume that monetary policy will remain expansionary throughout the projection horizon, so that inflation will fluctuate around 3% during much of the period, and activity will recover higher rates of expansion, especially towards the second half of 2017 and into 2018. Let me now present the details of our vision about the macroeconomic scenario and estimates contained in our Monetary Policy Report. The Monetary Policy Report Recent evolution of the economy and our projections The inflation outlook shows no substantive changes. Annual CPI variation has been at 2.7% since February, while core inflation—the CPIEFE—has decreased slightly (figure 1). The baseline scenario estimates that the real exchange rate will not change much and that capacity gaps will begin to close some time next year. In this context, core inflation will continue to decline for some months, to around 2%, to then approach values of the order of 3% towards the end of the projection horizon.
15  16  17  Figure 14 90-day delinquency rate (percent of loans)  10  4 Clearing houses and family subsidies  8  4  6  Chain stores  Banks (right axis)  4  3  3  2  2 11  12  13  14  15  16  17  Source: Central Bank of Chile using SBIF, SUSESO and SVS information. 20  Figure 15 Household indebtedness (percent of disposable income)  70  Housing  70  Consumer  60  60  50  50  40  40  30  30  20  20  10  10  0  06  07  08  09  10  11  12  13  14  15  16  Source: Central Bank of Chile using SBIF, SUSESO and SVS information. Figure 16 Real housing prices and mortgage debt (*) (real annual change, percent)  16  CChC  House price index IPV in Metropolitan Region  12 House price index IPV  8  15 Mortgage debt (right axis)  12 9  4  6  0  3  -4  0 11  12  13  14  15  16  17  (*) IPV stratified method. CChC hedonic model for new homes in Metropolitan Region (RM). Source: Central Bank of Chile using SII, CChC and SBIF information. 21