Annual growth in salaried employment has picked up again in recent months, although job creation in the most cyclesensitive sectors has remained slow. Meanwhile, nominal wages continue to grow at a strong pace, partly because they are generally indexed to past inflation (figure 6). Although the low  2  BIS central bankers’ speeches  level of unemployment seems to conflict with the state of the business cycle, there are some structural factors that might explain the unemployment rates below historic averages, such as changes in the demographic composition of the labor force (figure 7). Turning to our projections, in the baseline scenario GDP will grow in 2015 more than it did in 2014 and will stand between 2.5 and 3.5 percent, not very different from the December forecast. In this projection, GDP growth will remain below the medium-term growth estimate, which we place between 4 and 4.5 percent. The baseline scenario also assumes that in the first half of the year the economy will post a growth rate near the average of the past few months, with a recovery process that will become more visible towards year’s end. Growth in final domestic demand – without inventories – is revised downward from the December projection. This, because of a slower than expected recovery of both private consumption and investment, particularly the imported components. With this, total domestic demand growth drops to 2.5 percent annually.
True, our baseline scenario contemplates, among other assumptions, that such dynamism will be accompanied by improved agents’ expectations. As we have said before, this is a sensitive point that requires us all to cooperate. We must also bear in mind that the terrible natural disaster that just hit the north of our country will have some effect on the output figures that will be released in the coming months, which at this moment we can only guess and which will be able to assess only as time goes by. Moreover, as we well know, every adjustment process has its costs. In our case, the main associated cost has been higher inflation. In recent months inflation has exceeded forecasts and we estimate that it will remain above 4 percent for a longer time, strongly influenced by the depreciation of the peso, which has been greater and more persistent than previously thought. Thus, although we understand that higher inflation is part of the adjustment process I have described above, I want to be clear that its current levels have exceeded our estimates, and that inflation being above the upper limit of the tolerance range for several months in a row is a situation that does not leave us satisfied.