(2) Value above (below) 50 indicates optimism (pessimism). (3) Simple average between manufacturing industries' and trade sector's expected investment. Sources: Central Bank of Chile and Icare/Universidad Adolfo Ibáñez. Figure 4 Growth forecasts (*) (real annual change, percent)  2018 3.25  3.5  3.5  2019 3.5  2.5  2.5  2.5  Jun. Sep.  Dec.  4  4  4.25  4.25  3  3.25  3.25  3.25  Mar. Jun. 2.25  Mar. 17  Mar. 18  Jun. Sep. 17  Dec.  Mar. Jun. 18  (*) Ranges correspond to projected growth in each Monetary Policy Report. Red diamonds correspond to the Economic Expectations Survey at respective statistical cutoff. Source: Central Bank of Chile. 9  Figure 5 Actual and expected activity gap  Inflation expectations  (percent of potential GDP)  (percent)  4  2.6 2.6  2.6  4  2.6  2  2.4  2.4 2.4  2.4  0  0  2.2  2.2 2.2  2.2  -2  -2 2.0  Eurozone  2  U.S.  2018  2019  U.S.  2.0 2.0  2.0  U.S. -4 1.8  1.8 1.8  1.8  -6 1.6  1.6 1.6  1.6  -8  -8 1.4  1.4 1.4  -10  -10 1.2  -4  -6  Japan  Eurozone  1.4  Eurozone 05  08  11  14  17 20(f) 23(f)  1.2 1.2 17  17 Jul.
Public expenditure increased by 0.9%, y-o-y, mostly reflecting the negative growth rates of capital spending. As a result, the budget deficit of this period marked 8% annual decline. The fourth quarter highlighted a better pass-through of monetary stimulus in financial markets. It was also characterised by a better anchoring of interbank market rates and their decreasing volatility. The Bank of Albania has pursued an easing monetary policy during the last three years. The monetary stimulus has increased progressively during this period, bringing the key interest rate to record low levels and mitigating the liquidity pressures on the interbank market. However, the pass-through of easing monetary policy effects on the economy has been contained due to higher perceived risk premia and changed stance by financial market agents and the real economy. Over the first half of the year, the domestic primary market faced structural changes arising from implementation of new tight measures by the European Supervisory Authorities. This development impacted on maintaining relatively high yield rates, despite the easing monetary policy and lowering short-term interest rates in the money market. Normalisation of the primary market in the second half of the year was reflected in progressively falling yields over this period. This tendency might have been passed on to ALL-denominated private sector credit costs, though with lower intensity as a consequence of risk premia reflected in private agents’ credit price.