6  BIS central bankers’ speeches  Figure 1 GDP: Total, natural resources and other  Domestic demand by components  (annual change, percent)  (annual change, percent)  8  8  15 GFCF  NR 6  6 4  10  2  -2  -2 14  15  5 0  -5  -5  -10  -10  Total 0  Domestic demand  0 2  0  10  Private consumption  5  4  Other  13  15  -15  -15 13  14  15  Source: Central Bank of Chile. Figure 2 Trading partners' GDP (*)  Terms of trade (*)  (annual change, percent)  (index, 2008 = 100)  8  8 140  140  6  6 130  130  4  4 120  120  2  2 110  110  0  0 100  100  -2  -2 00  04  08  12  Sep.15 Report  16  90  90 09  Dec. 15 Report  11  13  15  17  Mar.16 Report  (*) Dashed lines show the forecast included in respective Monetary Policy Report. Source: Central Bank of Chile.
Rodrigo Vergara: Chile’s March 2016 Monetary Policy Report Presentation by Mr Rodrigo Vergara, Governor of the Central Bank of Chile, of the Monetary Policy Report before the Finance Committee of the Honorable Senate of the Republic, Santiago de Chile, 28 March 2016. *  *  *  Accompanying figures and tables can be found at the end of the speech. Introduction Mr. President of the Senate’s Finance Commission, senator Andrés Zaldívar; senators members of this Commission, ladies and gentlemen, Thank you for your invitation to present the vision of the Board of the Central Bank of Chile on recent macroeconomic developments, its outlook and implications for monetary policy. This vision is contained in detail in our Monetary Policy Report of March 2016. Since our last Report saw the light December of last year, inflation has behaved as forecast. It has remained high, mainly due to the effects of the significant depreciation the peso has accumulated, in a context where indexation to past inflation and narrow capacity gaps have limited the decline of non-tradable inflation. Regarding activity, 2015 figures showed weaker demand and slower than expected growth towards the end of the year. As I will describe in a moment, this factor, along with an expected weakening of the external scenario, results in reduced growth prospects for this year. In our projection scenario, inflation is assumed to be slightly lower than we thought in December.