However, this recovery process has been slower than we expected a few months ago. In particular, because mobility has not increased as quickly as we had hoped and the social distancing, both compulsory and voluntary, has had more long-lasting effects on some areas of the economy, such as construction and services. The withdrawal of pension savings has triggered temporary increases in consumption, especially of imported goods, which have had a positive impact on sectors such as retail but have also put pressure on the prices of the most demanded products. In fact, inflation data for September and October showed significant upward surprises, mostly concentrated in the categories of durable consumer products, such as home equipment and electronics. The significant depletion, and in some cases exhaustion, of inventories of these products has contributed to this result. Investment, beyond the reactivation of public and private projects, is being affected by the restrictions on mobility that have taken a toll on construction, the financial situation of companies, and the persistent uncertainty, so it is lagging further behind than consumption. The labor market, meanwhile, has shown some recovery, with an increase in employment compared to mid-year, but mostly concentrated in non-salaried jobs. Very recently we learned of the Metropolitan Region’s rollback to Phase 2 of the “Step-by-step” plan, which could take some of the impulse off activity at the margin. However, it could also help to avoid more drastic measures in the future by articulating a more orderly transition towards a vaccine.
The withdrawal of pension savings will have a significant effect on consumption and trade-related activities next year. The fiscal stimulus will continue to be positive, in accordance with the approved budget. The Chilean economy will receive a slightly greater external boost than previously considered, with our trading partners growing by an average of 4.9% in the years 2021 and 2022, with an average copper price of USD 3.15 per pound in the same years. With this, we project that after falling between 6.25% and 5.75% this year, the Chilean economy will grow between 5.5% and 6.5% in 2021 and between 3% and 4% in 2022 (Table 1). With respect to monetary policy, our assessment of the macroeconomic scenario and its outlook leads us to anticipate that the monetary stimulus will remain high for an extended period of time, so as to ensure the consolidation of the economic recovery and the achievement of the Bank’s objectives. In particular, we foresee the Monetary Policy Rate (MPR) remaining at its minimum level for much of the 24-month monetary policy horizon. As for the unconventional measures, they will remain in place. This considers that the total stock of bank bonds acquired by the CBC under different programs—around USD 8 billion—will be maintained for the next six months, reinvesting the coupons as they mature. This excludes the purchases made under the Cash Purchase and Term Sale (CC-VP) program, which have a different objective. With respect to the FCIC, the Board has made no changes to the total amount of resources available.