As we recognize in the sensitivity and risk scenarios of this MP Report, this is one possible outcome and its implications for the economy should be carefully monitored. While this is a matter in progress that we must follow closely, inflation has remained high for a long period of time and continues to be a complex and high-impact problem. The costs of this situation are evident. We have all felt the effects of rising prices in our daily lives, and a part of the population has suffered the hardest. Inflation introduces risks and distorts the information contained in prices, thus affecting investment, growth and employment. It is not possible to contemplate sustained growth in employment and activity if inflation is not kept under control. Therefore, bringing inflation back to the 3 percent target is an unavoidable task. I want to insist that, even if total inflation is on a downward path and will soon return to single-digit figures, the problem has not been solved. The convergence of inflation to 3% has not yet been consolidated and as long as it remains above that figure, the task of the Central Bank will not be complete. The causes of inflation have been discussed at length. The main one was the excessive increase in spending that led to the liquidation of social security savings and across-the-board fiscal transfers. In addition, there was the pandemic and its consequences on the local economy and in global production chains, plus the effects of the war in Ukraine.
As foreseen in the central scenario of this MP Report, projected growth in the United States and Europe will be negatively affected by lower credit expansion and greater global uncertainty. This effect will be most visible in the second half of 2023 and early 2024. For these years, growth in those developed economies that are Chilean trading partners is expected to average 0.4%, which compares with the 0.7% forecast in December (figure 10). Emerging economies will face tighter financial conditions, which will also affect the external demand relevant to Chile. The better outlook for China after its reopening, together with the evolution of the copper and oil market balances, has been behind the improvement in our terms of trade, which are revised upwards from the last MP Report. This combines the better outlook for copper prices and lower projected prices for foods and fuels. For copper, our projected prices for this and the next two years are increased. We foresee an average price of 3.85 dollars per pound in 2023; 3.65 dollars per pound in 2024, and 3 and a half dollars per pound in 2025. Oil prices have been quite volatile due to the tensions in the financial markets in recent weeks and their possible implications for world growth. In addition, inventories have been accumulated and OPEC has recently announced production cuts. In the central scenario, the average Brent-WTI price is projected to gradually decline from 73 dollars per barrel in 2023 to 67 dollars in 2025.