The correction with respect to March responds to the negative developments in the external scenario in recent weeks, particularly as the escalation of the trade conflict has led to greater risk aversion, causing, among other effects, a global appreciation of the dollar and a reduction in most commodity prices, including copper. The latter is especially relevant due to its effect on the terms of trade (ToT). Thus, for the period 2019-2021 we assume that the ToT will accumulate an increase of 0.6%, which compares with the increase of 1% expected in March (Figure 10). This projection considers a copper price whose annual averages will be closer to 280 cents per pound between 2019 and 2021, and not around 290 cents per pound, as we estimated in March. As for global growth, the baseline scenario adjusts slightly the expected expansion of our trading partners during this year, to 3.2% (3.3% in March). In this correction, a much lower performance of Latin America becomes important. We still estimate that China will grow around 6% and the US somewhat above 2% (table 4). Although our trading partners’ growth is adjusted only slightly, there has been a marked deterioration in world trade growth, which is captured in the less favorable evolution that is expected for Chilean exports (Figure 11). In the baseline scenario, we project that these will lose dynamism, particularly in 2019, due to the difficulties encountered by some exporting sectors. Also because of the lower copper output, which will impact metal shipments.
Although each case is, in some sense, unique, and international experiences are not easily transferable, its analysis provides some useful background to understand the Chilean case. The first is to confirm the exceptional nature of the Chilean experience, due to its size and speed. In addition, given the factors that motivate migration— particularly from Venezuela—one can think that it will not be reversed any time soon. Secondly, recent immigration is characterized by an average population that is more qualified, younger and with a greater labor participation than the Chilean population. Third, relative to other countries, Chile poses fewer legal impediments to enter the labor market, and unlike other migratory cases, shares the language and other cultural aspects with a majority fraction of the immigrant population. To update our trend growth estimate, we use the population projections for the period 1992-2050, published by the National Statistics Institute (INE) at the end of 2018. These reflect the significant immigration flow observed since 2015, which is expected to continue to be important in the coming years (Figure 5). This affects the projection of the labor factor and, through it, the growth capacity of the economy. The other forecasting assumptions do not undergo major changes with respect to the fiscal year of 2017, except for the updating of the Quarterly National Accounts figures and an explicit modeling of the way in which capital and total factor productivity respond to the immigration-related increase in the labor factor.