'19 MP Report  -2  -2  -4  -4 I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV 2013  2014  2015  2016  2017  2018  2019  2020  2021  (1) Gray area shows lower and upper bounds of of gap estimation range, using various methods for inferring potential GDP (i.e. trivatiate, FMV-X, HP, SVAR, MEP, SSA and XMAS migration gap). See Aldunate et al. (2019). (2) Dotted lines show forecast. Source: Central Bank of Chie. Figure 7 Estimates for trend neutral real rate (percent)  3.0  3.0 10-yr DN BCP (3)  2.5 2.0  2.5  5-yr DN BCP (3)  2.0  open-economy DN (3)  1.5  1.5  HLW (2)  1.0  1.0 5 in 5 rate (1)  0.5  0.5  0.0  0.0 02  04  06  08  10  12  14  16  18  (1) The 5 in 5 rate is derived from financial asset prices adjusted for term premiums. (2) Based on Holston, Laubach and Williams (2017). (3) Based on Del Negro et al. (2017), using 5-yr BCP data and assumptions for an open economy. See box V.2 in June 2019 M P Report. Source: Central Bank of Chile.
Within imports, the downward adjustment of consumer goods stands out, in response to the performance of car sales in the local market, but also to the decrease in the purchase of machinery and equipment (specifically trucks), which is estimated to continue beyond the first quarter. This is reflected in the current account, which will have deficits of somewhat under 3% of GDP in the projection horizon. III.3. Working assumptions The baseline projection scenario is made using a set of information and analysis that determine how inflation will converge to the target. This includes the expected behavior of the activity gap—which factors in potential and actual growth—, the copper price, the oil price, the dollar in the world, etcetera. Page 6 of 18  The baseline scenario also includes working assumptions for variables such as the real exchange rate, the behavior of fiscal policy and the MPR. In particular, with respect to the real exchange rate, we foresee that during the next two years it will fluctuate around its averages of the last 15 and 20 years. In the fiscal area, it is assumed that in 2019 the economy will receive a boost consistent with the approved budget. From then onwards, it is assumed that the structural deficit will follow the path of gradual descent defined by the authority. No modifications are introduced as a result of the recent announcements to streamline public investments given that, according to authorities’ statements, these will be made within the limits imposed by the structural balance target.