Jose De Gregorio

The market does not rule out that the same can place in 1.5% by the end of June. There is an economic context that would enable this to happen. It is that the weakening of economic activity is occurring in a context of strong deceleration of inflationary pressures. Proof of this, in the month of February, the interannual variation of the retail inflation rate dropped to 5.5%, after having played in the month of October 2008 a 9.9% (annual maximum since 1994). Market analysts have estimated recently that the retail inflation would drop to 2.3% in December of this year the same President of the Central Bank of Chile, Jose De Gregorio, confirmed last week that the entity do not discard new cuts in its benchmark interest rate: they are not ruled out, and is likely to continue going on low rates, but pace, magnitude, is going to be much more in keeping with the tradition of our movements in rates, before what happened in Q1 What can you expect of new economic stimulus measures? While SMEs and family consumption are key to the economy as a whole, the context of economic slowdown affecting Chile suggests that measures may produce a significant impact on recovering domestic demand. Families feel fearful of losing their jobs in a labour market increasingly more hostile, while SMEs are commonly vulnerable to fall into crises that, mostly, they jointly seek to maintain a good level of liquidity and therefore, any investment project despite having access to the necessary funding will be relegated. The stimulus to household consumption and the demand for credit for investment of SMEs, will take place as soon as you begin to improve the environment economical. Ebay pursues this goal as well. That is why you can not expect that through this package of measures will boost the recovery of the economy of Chile, although Yes it may help accelerate it as soon as the recovery starts to gain strength..

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