Projections The central scenario projections contain limited changes with respect to the March Report. Inflation is expected to continue to fall and will converge to the target within the second half of 2024. For December of this year, the annual variation of total CPI is foreseen at 4.2%, compared with the March estimate of 4.6%. Core inflation will end 2023 at 6.5%, which compares with the 6.9% projected in March. Both indicators will converge to 3% during 2024 and will remain in the neighborhood until the end of the policy horizon, that is, the second quarter of 2025 (figure 16). Core inflation will decline more noticeably towards the end of 2023 and the beginning of 2024, as anticipated in the March Report. The projections reiterate that, in the short term, the monthly variation of services inflation will continue to exceed its historical averages. This incorporates the greater rigidities that these prices normally present and the impact of the still-high inflation on the usual repricing mechanisms. Goods inflation, meanwhile, will benefit from a lower than expected trajectory of the real exchange rate (RER) in March. This is consistent with the nominal appreciation of the peso in recent months, in a context where, as I mentioned, local uncertainty has diminished. Looking ahead, the effect of tight external financial conditions continues to be considered. Compared to March, activity projections show minor changes, mainly associated with the mining industry. This year, the annual variation of GDP will be between a 0.5% fall and a 0.25% rise.
(2) Red diamonds correspond to forecasts in the central scenario of June 2023 MP Report for each year in 2023-2025 period. (3) For oil: WTI-Brent average price per barrel. Sources: Central Bank of Chile, Bloomberg, and FAO. 18  Figure 20  MPR corridor (*)  (quarterly average, percent)  25.II  25.I  24.IV  24.III  24.II  24.I  23.IV  23.III  23.II  23.I  22.IV  22.III  22.II  22.I  21.IV  21.III  21.I  21.II  Jun.23 corridor FTS EES Mar.23 corridor MPR  13.0 12.0 11.0 10.0 9.0 8.0 7.0 6.0 5.0 4.0 3.0 2.0 1.0 0.0  (*) The corridor is built with the methodology described in box V.1 in March 2020 MP Report and box V.3 in March 2022 MP Report. For details, see methodological note in figure II.10, June 2023 MP Report. Source: Central Bank of Chile. 19