If the country’s GDP has grown, can we already talk about recovery? This is what the experts say

Colombia’s Gross Domestic Product (GDP) grew by 2.1% in the second quarter of 2024. The figure was above most forecasts by national agents, which indicated that the indicator would be positioned between 1.7% and 2%.

(Read more: Colombia’s GDP for the second quarter of 2024 grew 2.1%)

Given this result, President Gustavo Petro stressed that “is achieving the economic reactivation of Colombia”a behavior driven by “the reduction of the real interest rate, due to the exceptional growth of agriculture and the government’s activity in health and education.”

And although GDP figures provide some reassurance regarding the health of the Colombian economy, There is still a long way to go before we can talk about economic recovery. At least that is what some voices that have spoken out on the subject say.

In response to the president’s statements, former DANE director Juan Daniel Oviedo said that although the results are positive, the economy’s performance is not so encouraging. “Between his coming to power and 2024-II, the wealth of the economy has grown by 1.6%. Yes, in 21 months, just 0.9% annually on average,” Indian.

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In this regard, he stressed What are the good, bad and most serious points? to take into account.

On the positive side, he noted that public consumption, that is, operating expenditure, is at levels similar to those recorded during the pandemic. The bad thing is that domestic demand (private consumption + public consumption + total investment) is falling.in other words, it is at a lower level than in 2022-III.

The former director of Dane also indicated that the aspect “more serious” In order to talk about recovery, it is essential to achieve investment recovery, which, up to now, is progressing at a slow pace. “For every $100 invested in 2022-III, only $71 was invested in 2024-II. Yes, 29% less,” he added.

Along the same lines, Oviedo emphasized the need to implement a recovery plan compatible with these realities and above all with a stimulus to private and public investment. He also referred to the proposal for forced investments that the Government has put on the table, mentioning that this would not give the country’s economy the boost it needs at this time.

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Another figure who spoke out regarding the most recent report on the growth behavior of the Colombian economy was the former Minister of Finance, José Manuel Restrepo, who highlighted that leitherGDP data for the first half of the year show bittersweet results.

“It is sweet in the sense that the second quarter of 2024 already shows a recovery, agriculture and some services are performing well, investment has already bottomed out in the fall and is going up and civil works are reacting positively,” mentioned.

According to Restrepo, the sour side of the situation can be seen in that Even the growth of the semester, 1.5%, is still quite weak. and it is not enough for either revenue collection or job creation. This is taking into account the downward trend that industry and commerce have been registering, both key sectors for the economy.

“The reactivation plan is still urgent so that this growth is sustainable and please ‘let’s take off’ until growth is at least 4%. The economy needs it this way to improve public finances and to stop further job losses,” the former minister rescued.

He also recalled that there is still a long way to go to return to the levels of August 2022 in terms of the leading indicators monitoring the economy. “For good growth, the traffic lights must be green”Restrepo stressed.

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