It’s no secret that the economy in Colombia It has been going through a difficult period due to high inflation, electoral uncertainty and the impacts of the war in Ukraine. Given this scenario, Fedesarrollo issued its economic perspectives from the first quarter of 2022.
Initially, it is expected that global economy moderates its growth rate because it is faced with a narrower financial panorama, with high persistence of disruptions in the global supply of inflation and the effects of the war between Russia and Ukraine on the supply of raw materials, trade flows and the productive capacity of the economies.
This is how Fedesarrollo explains that the performance of the Colombian economy could be affected by different factors. One is the slowdown in the economic growth of the main trading partners. There are also the increases in oil and coal prices that can favor exports and income tax in the country.
In turn, the context of political uncertainty, the normalization of monetary policy in advanced economies and the favorable expectations of foreign investors about countries commodity exporters would put pressure on the exchange rate.
In this sense, the entity anticipates that next May the cost of living will begin to normalize accompanied by a reduction in inflation.
In addition, Fedesarrollo hopes that this year the Brent oil price between 96 and 101 dollars per barrel, with an average production between 754 and 764 thousand barrels per day.
With respect to exchange ratethe entity expects the dollar to be between $3,880 and $3,930 pesos.
Regarding the growth of the Colombian economy, Fedesarrollo maintained its previously stated forecasts. There, a real growth rate was reported in the GDP of 4.6% by 2022as a result of the high production recorded in 2021.
With the high prices of raw materials, Fedesarrollo expects that the exports continue with an increasing curve. Even if they exceed the growth of imports and outflows of primary income. This would imply a reduction in the deficit to reach -4.5% of GDP.
Regarding the fiscal panorama, the entity explains that in the medium term the forecasts are more favorable. However, they consider it necessary to take measures that promote an increase in permanent income and an adjustment in spending.
That is why, as a result of the normalization of monetary policy, and inflation outside the target range, they expect the Banco de la República to continue increasing the interest rate, closing 2022 at 7.75%.
As for the CNG fiscal balance, Fedesarrollo estimates that this can be located at -6.2% of GDP in 2022. On the other hand, they established that the housing loan portfolio was the one that grew the most, followed by consumer credit. The commercial portfolio, for its part, grew positively.
For this year, Fedesarrollo also hopes that the growth of regions is between 4.3% and 4.7%. The Caribbean region being the one that presents the most progress.