The International Monetary Fund (IMF) revised upwards its growth forecast for the Colombian economy this year, and indicated that “Growth is expected to be above potential at around 5.75%, driven by strong household consumption and the continued recovery in investment and exports.”
(Inflation and rates, the main challenges that the IMF sees in the region).
The revision was published in a comment issued by the entity after the executive board of the IMF concluded this March 25 the Article IV consultation with Colombia, name by which the revision made by the organism to the economies of the countries is known every year.
According to the IMF, in the medium term, GDP growth is expected to converge towards its potential level of about 3.5%. And he stressed that the projected rise in the prices of the main exports of raw materials would allow a significant reduction in current account deficit, from -5.7% of GDP in 2021 to -3.3% and -3.4% of GDP in 2022 and 2023respectively.
(The IMF will cut the increase forecasts due to the war).
However, the entity did not stop warning about the inflationary pressures facing the economy. “Inflation continues to rise, pushed by supply-side shocks in a context of robust demand. Higher inflation is expected to persist, likely to remain above the upper limit of the central bank’s tolerance band (4%) through 2022, with upside risks. It is projected that by the end of 2022 inflation will be around 6.75%”, the IMF said.
(‘The fiscal deficit in 2021 fell more than we expected’: IMF).
The agency assured that the risks for growth continue to lean downward, although it recognized that external risks remain high due to the intensification of the current war in Ukraine. The IMF stressed that although higher hydrocarbon prices may benefit Colombiathe rise and volatility of international food and energy prices, as well as more persistent disruptions in global supply chains, would exacerbate domestic inflationary pressures.
BRIEFCASE
