However, they will continue to grow above their 2000–2007 average. The change in composition and weight of this group of countries, where emerging economies – especially China – have sharply increased their share, explains this result. While in 2000 emerging economies weighed less than one third in the group of Chile’s trading partners, they are expected to be closer to one half in 2011 (figure 12). On the other hand, a drop in the terms of trade is expected. This last projection is based on a copper price of $ per pound in 2012 and $ in 2013, and a WTI oil price averaging around $ per barrel in 2012–2013 (table 2). In this scenario of reduced external impulse, the Chilean economy is forecast to grow in the range of 6.25% to 6.75% this year, in line with June’s projections. Up to the second quarter, output was growing above the trend and above expectations in the June Report; consumption was slowing down from its strong expansion but not as much as foreseen; the labor market continued to give signs of being tight and financial conditions were still favorable, with credit showing an increasing growth rate (figure 13). Our present scenario foresees that domestic demand will grow 9.1% this year, more than forecast in the last Report. This will reflect the impact of increased gross fixed capital formation of the first half, especially in machinery & equipment, as well as greater inventory accumulation.
Figure 15 Inflation expectations  Forward breakeven inflation based on swap rates  EES and FOS surveys (*) (percent)  7  7 7  (moving weekly average, percent)  7  6  6 6  6  5  5 5  5  4  4 4  4  3  3 3  3  2  2  1  2 2 1 1  0  0 06 07 08 09 FOS 1 yr ahead FOS 2 yrs ahead  10  11  EES 1 yr ahead  EES 2 yrs ahead  1 0  0 06  07 1 in 1  08  09 3 in 2  10  11 5 in 5  (*) The FOS uses survey of first half of the month, except for August 2011, which uses survey of second half of the month. Source: Central Bank of Chile. BIS central bankers’ speeches  15  Figure 16 MPR and expectations  (percent)  9  9  7  7  8  8  6  6  5  5  4  4  3  3  2  2  1  1  0  0 07  08  09  10  11  12  13  TPM  EES, August 2011  Forward IPoM septiembre 2011 Forward, Sep.2011 Report  FOS, second half August 2011  Source: Central Bank of Chile. 16  BIS central bankers’ speeches