2022 GDP: market raises growth projections

The Colombian economy finished its first quarter, and although there is still a long way to go before the end of 2022, For banks, rating agencies and multilateral organizations, Colombia will have a favorable 2022and this is reflected in several revisions they have made to their forecasts recently.

(GDP of Latin America may grow less than 3% this year: IDB).

Yesterday corficolombiana presented the update of its projections for this year, where the firm placed its forecast for GDP in 2022 at 5.6%, from a previous figure of 5%.
The entity decided improve their local economic prospectsbased on, on the one hand, the high starting point of productive activity after the solid performance of the last quarter of 2021, and also the favorable effect of the low statistical base of the first half of last year, when economic activity was affected by the lockdowns and by the National Strike in May.

“Private consumption will continue to be the main engine of local growth, but it will slow down. The leading indicators related to household spending remain favorable in the first quarter of the year, but we expect their dynamics to moderate in the coming quarters due to the effect of higher interest rates and the accumulated increase in prices”, highlighted José Ignacio López, director of economic research at Corficolombiana.

(The social dimension of companies).

Also yesterday, the risk rating agency Fitch raised its projection for this year, from 3.9% to 5.2%.

Among the latest updates is also the projection of the International Monetary Fund (IMF), which this week published a comment on the Colombian economy, and revised its projection upwards to 5.75%.

The entity highlighted how the country comes from being one of the most dynamic in the region, and that is why a favorable 2022 is expected, in which growth is “driven by strong household consumption and the continuous recovery of investment and exports.

Likewise, a week ago Citi also presented its forecast update for 2022. Esteban Tamayo, chief economist for Colombia, Peru, the Caribbean Region and Central America for Citi, confirmed his forecast of 4.5% for the country, noting that Although it is a conservative figure for Colombia, the prospects are more favorable than those for other regional peers such as Peru, Chile and Brazil.

“There is an important risk, for which we still do not dare to raise the projections above 5%, and it is the electoral issue,” Tamayo clarified in this regard. According to the economist, the uncertainty due to the high political polarization private investment could experience a notorious shock, especially in the second quarter of the year.

Banco Itaú also updated its projections in the last two weeks. On March 17, the bank raised its expectation for GDP in 2022 to 4.5%, from a forecast of 4%.

At the beginning of March, the economic studies centers Anif and Fedesarrollo also presented their forecasts for this year’s economy. In the case of the former, the forecast is between 3.7% and 4.2% and that of Fedesarrollo at 4.6%.

OTHER PROJECTIONS

Some of the entities continue to review their models and are waiting to incorporate other elements, such as the effects of the Russian invasion of Ukraine.

Banco de Bogotá’s projection stands at 5.5%. “This is based on the fact that the recovery of the economy continues, there are some sectors that are still somewhat lagging behind, and very surely they will perform well this year, which are mainly services, such as entertainment events, theaters, and others that are still opening. “, highlighted Camilo Pérez, director of economic research at the bank.

Pérez stressed that the bank recently revised its growth projection, but that there is a big question mark that has to do with the war in Ukraine. “The recovery continues, and although Colombia is not as exposed to channels of trade, investment or flows of people, the world is going to have a negative impact, and that could end up hitting Colombia. There is that factor of uncertainty, but for now we are not thinking of revising the projections”, he clarified.

Similarly, Scotiabank is sticking to its 4.5% projection that it set after the 2021 GDP release, despite an upward bias in the numbers. In the case of Bbva Research, the forecast is at 4%.

On the other hand, in the first week of March the The Ministry of Finance presented its Financial Plan for this year, with a projection for the 2022 GDP of 5%while the Banco de la República defined last January, when presenting its Macroeconomic Policy report, that its forecast is at 4.3%.

At the international level, on the other hand, the World Bank expects the Colombian economy to grow 4.3% in 2022, while the Organization for Economic Cooperation and Development (OECD) remains at the 5.5% that it defined at the end of 2021. In February, the OECD presented an economic study for the country, but maintained its forecast for GDP.

LAURA LUCIA BECERRA ELEJALDE
BRIEFCASE