Page 20 of 27  Figure 13 Contributions to revisions to 2021 GDP growth (1) (percentage points) 3.0  Increased fiscal transfers  Better beginning of year and agents' adaptation  Third pension fund withdrawal  Other (2)  2.0  1.1  1.0  0.7  0.4 0.3  0.0 1 (1) Built using midpoint of forecast range of March and June 2021 Monetary Policy Report. (2) Includes external sector and mining. Source: Central Bank of Chile. Figure 14 IMACEC scenarios consistent with 2021 GDP growth range (*) (index; 2013 average =100; seasonally adjusted series) April level + Common minimums 2020 average Growth 2021=9.5%  125 120  2020 Growth 2021=7.5%  2021 Growth 2021=8.5%  Considers that the economy remains in February’s level  115 110 105 100 95  Jan  Feb  Mar  Apr  May  Jun  Jul  Aug  Sep  Oct  Nov  (*) Colored area indicates period during which the benefits approved under the Common Minimums Agenda will be in place. Source: Central Bank of Chile.
During property market and economic downturns, the chance of default for this group of borrowers can be significantly higher than those with only one property under mortgage. In view of this, the HKMA considers it necessary to require banks to further tighten the underwriting criteria for mortgage loans to borrowers with multiple property mortgages to reduce the risk of banks. BIS central bankers’ speeches  1  6. Besides, the HKMA notices a recent trend of lengthening average tenor of new mortgage loans. The average tenor for new mortgage loans now is 25 years, which is three years longer than that of 22 years in 2009. Some banks have extended the maximum tenor to even 40 years. Prolonged loan tenors will not only increase credit risk of banks, but may also weaken the ability of borrowers to withstand interest rate risk. In particular, when mortgage rates return to more normal levels, borrowers with a loan that already stretches to 30 or even 40 years simply cannot seek to reduce their monthly instalment payment burden by extending the tenor, and may therefore face financial difficulty. Therefore the HKMA has now required banks to set the ceiling for the maximum loan tenor for all new mortgage loans to not more than 30 years. 7. The above measures take effect immediately. However, loan applications in respect of property transactions with provisional sale and purchase agreements signed today or earlier will not be affected. 8. Mr Arthur Yuen, our Deputy Chief Executive, will explain the details of these measures later.