Figure 12 Growth in loans (annual change, percent)  Chile (1)  Emerging economies (3)  90  90  60  75  75  50  50  60  60  40  40  45  45  30  30  30  30  20  20  15  15  10  10  0  0  0  0  -15 -10  -15 90 93 96 99 02 05 08 11 Housing  Consumer  Corporate (2)  60  -10 06 Brazil  07  08  09  Colombia  10 China  11 Chile  (1) Preliminary figures for May 2011. (2) Sum of commercial loans and foreign trade loans. (3) For Brazil, figures cover up to February 2011. For China and Colombia, up to March 2011. Sources: Central Bank of Chile, International Monetary Fund and Superintendence of Banks and Financial Institutions. BIS central bankers’ speeches  13  Figure 13 Indebtedness and financial burden (percentage of disposable income) 80  20  60  15  40  10  20  5  0  0  02.IV  04.IV  06.IV  Total debt (RDI)  08.IV  10.IV  Long-term financial burden (RCI)  Sources: Central Bank of Chile based on information from SBIF, SuSeSo and SVS.
Private projections are consistent with this scenario of lower inflation throughout the projection horizon (figure 8). This projection is based on the assumption that, on average, output gaps will be closed throughout the projection horizon, and that the propagation of specific price shocks will continue to match the historic average, as it has in recent months. As for monetary policy, forecasts use as a working assumption that the monetary policy rate will follow a path comparable to the one that can be inferred from several expectation indicators (figure 9). As usual, there are risks that may cause the macroeconomic scenario described here to deviate from projections. On this occasion, the Board estimates that the risk balance for inflation and output is unbiased. Although milder than in March, one important risk is the persistence and propagation of the specific price shocks of the past few quarters. While fairly stable commodity prices are assumed for external markets, a scenario of higher prices significantly affecting local inflation because of the current status of output gaps cannot be ruled out. The labor market is showing important strength, with the rate of unemployment in low levels by historic standards and a substantial increase in employment, while various sources of information speak of the difficulties in hiring skilled labor in some regions and economic sectors. The y-o-y increase in wages is up from end-of 2010 (figure 10). However, the combination of increased employment, higher wages and stronger economic growth has allowed unit labor costs to vary in line with the inflation target.