The United States regained strength in the second quarter, thanks to the good performance of private consumption and investment, and better expectations. In Latin America, the growth forecast has been lowered for this year and next in most countries, although with some heterogeneity. In China, government policies have managed to stabilize growth. Our baseline scenario assumes that our trading partners will grow an average 3.6 percent in 2014 and 2015, two tenths of a point less than foreseen in June (table 1). The baseline scenario assumes that the slowdown in the domestic economy will be more persistent than previously expected. Thus, as anticipated, the GDP growth forecast for this  BIS central bankers’ speeches  5  year is adjusted to between 1.75 and 2.25 percent, below the June estimate. In 2015, consistently with the low basis of comparison and limited economic dynamism, we expect GDP to grow between 3.0 and 4.0 percent annually. The recovery, though moderate, is based on a greater monetary stimulus and lower market interest rates; stronger fiscal stimulus; increased trading partners’ growth; a real depreciation of the peso; and improved private expectations. As already noted, for this projection, the Board assumes that the medium-term growth of the Chilean economy is between 4 and 4.5 percent. The domestic demand growth forecast for 2014 has also been corrected downward, particularly for investment. This change responds to actual second-quarter indicators that fell short of the forecast, and to the Capital Goods Corporation’s investment projects that were revised downward in the last survey.
We must not forget that copper, our main export, traded at nearly 4 dollars per pound for an extended period, and now it is closer to 3 dollars and may fall further in the long term. Moreover, during the last decade, coincidentally with higher prices and supply shortages, investments in mining have increased significantly around the world. BIS central bankers’ speeches  1  Chile was no exception. During the 1990s and early 2000s, mining investment averaged 2 to 3 points of the country’s GDP. Between 2006 and 2013, this figure rose to 5 points of GDP, peaking in 2012 at 6.5 percent of GDP. This phenomenon not only allowed the country to enlarge its mining capacity, but also created major productive linkages toward other sectors, including construction, trade, and manufacturing industries. The north of our country, especially cities such as Iquique, Antofagasta, and La Serena, has seen strong development and growth thanks to the positive impact of this phenomenon. However, this investment cycle, as has been noted on numerous occasions, has entered a matured stage, resulting in a decline in the number of projects under way. This is also true of other metal-exporting economies like Australia and Peru, although differing in intensity and timing, and is symptomatic of this phenomenon. However, the aforementioned maturation of the global cycle of copper investment is not the only reason behind the slowdown in mining investment.