In any case, the bias and probabilities of external risk scenarios reinforce the need for a small and open economy such as Chile to maintain deep-rooted macroeconomic foundations, particularly a path of fiscal consolidation, sustainable debt levels and adequate capitalization of the country’s banking system. At home, we estimate that the risks to activity are unbiased. The economy has brought positive surprises in good measure because the possibility of a more dynamic behavior of investment identified in previous reports has materialized, short only of a more significant response from large-scale projects and the real estate sector. For its part, although the labor market could take a little longer than expected to recover, the latest data tend to provide greater robustness to the employment, wage bill and consumption projections. As for inflation, we estimate that the risks are unbiased. Although the risks in the international scenario and their negative implications have increased, the economy has shown more dynamism than expected and the short-term outlook for headline inflation has been corrected upwards. In this context, we consider that the current level of monetary stimulus is less necessary and may begin to withdraw it in the coming months. Thus, we reaffirm our commitment to conduct monetary policy with flexibility, so that projected inflation stands at 3% over the two-year horizon. Institutional advances and challenges As I pointed out at the beginning, this presentation to the full Senate has a special connotation.
On the one hand, private salaried employment is increasing at annual rates above 1%, something not seen for several quarters, and shows some dynamism in important sectors, such as construction and trade. On the other hand, evidence has been emerging that suggests that the effective growth of employment would be somewhat greater, since the labor market has been able to absorb a significant influx of immigrant workers. This figure is not yet captured by the employment surveys, which are based on population projections that have not yet been updated according to the 2017 Census. This leads us to evaluate that the lag we observed between employment and activity is beginning to dissipate (Figure 2). At the same time that private salaried employment has increased, the unemployment rate has increased too, as exemplified by the figures from the National Statistics Institute (INE) employment survey for the May-July moving quarter. This is so because during the phase of low growth of 2015-2017 many people became self-employed, others worked fewer hours than desired and others simply quit the labor market because they could not find what they were looking for. In recent months, this process has been reversed, with the workforce growing around 2.5%, more than the 1.5% of the period 2015-2017. It is important that in the next few months the speed of job creation, especially salaried jobs, match and hopefully surpass the workforce’s growth. Every September, the CBC revises its potential growth estimates.