The Organization for Economic Cooperation and Development (OECD) estimated that the Colombian economy would grow 6.1% in 2022, according to the new global outlook report released on June 8.
Thus, the organization improves its forecasts for the country’s GDP from the 5.5% previously calculated.
In an entire chapter devoted to Colombia, the organization points out that the private consumption is the main driver of this recovery of the Gross Domestic Product, also motivated by a gradual recovery of employment.
The OECD points out that the strong prices of raw Materials, main export of the country,they have improved” the terms of trade and “are supporting fiscal results, in the context of growing external demand”.
Regarding monetary policy, the organization maintains that this has been “substantially accelerated” and these financial conditions are expected to “remain tight until the end of 2023”.
Next, the group of good economic practices, pointed out that “fiscal policy will provide continued support to vulnerable households through 2022, while spending cuts in other areas will give way to a gradual fiscal tightening that will intensify in 2023”.
Stabilize public debtwill require additional efforts”, maintains the OECD, which specifies that the recent tax reform has already laid the foundations for this adjustment: “Addressing longstanding challenges, such as low tax revenues, low tax progressivity, and low coverage of social benefits, could ensure a more inclusive recovery”.
Looking ahead to 2023, the economic organization forecasts that the Colombian GDP grow 2.1%, a considerable reduction from the 3.1% previously calculated.
“Private consumption may gain strength in 2023 as high inflation eases and unemployment recedes”, remarked the institution.