After economic growth results were obtained last year that were better than those initially projected, market and analyst expectations for 2025 fully affirm that The Gross Domestic Product will continue to rebound during this period, although they make it clear that at a modest pace.
Overcome uneven growth and give a boost to sectors such as industry or construction and sustain the recovery of trade, to add efforts to the results achieved from the public sector and agriculture; It is one of the challenges that the economic authorities will have.
Read: Stagnation, the first challenge of inflation in 2025
According to BBVA Research experts, after the pandemic, The country has walked without a clear catalyst to boost the economy and although it recognizes that between 2020 and 2022 the priority was to overcome the ravages of Covid-19, from 2023 and at least until 2026; No sector is seen as a lever for economic growth.
In this sense, they emphasize that it is indisputable that there are signs of recovery, but that it cannot be overlooked that the genesis is in consumption, which in turn has driven production, although not as it should, and not in the arrival of new capital or growth of the dynamics of investment.
“On the consumer side we have seen better auto sales, growth in home sales and some recovery in household confidence; while on the production side, we continue to see low demand for commercial electricity and let’s not forget that when an industry turns on the machines it is because it is producing more. So, a reduction in commercial electricity demand means that we are not yet at high production levels,” they explained.
Although since August of last year the creation of a reactivation plan was announced and at the end of September several agreements were signed to boost the economy through effective strategies, in addition to the ‘credit pact’ that has already been in place for four months, The market does not perceive effective actions by the authorities.
General Budget of the Nation.
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Analysts also consider that investment must be recovered and that this is precisely the starting point of an eventual reactivation plan that contains multiple alternatives and favorable rules of the game to strengthen investor confidence and thus recover lost capital.
As long as this does not happen, the projections show that growth will remain below the 3% that economists suggest, leaving the country in a scenario of low attractiveness for the long-term market.
This task has been in charge from the beginning of the Administrative Department for the Presidency of the Republic, which continues to work on it.
The budget and the doubts that remain
In the midst of the country’s expectation to finally know how the spending accounts will be in the General Budget of the Nation for 2025, the Ministry of Finance continues to leave doubts regarding the projected expenses for this period, since although it announced that it will cut the $12 billion that was lost with the fall of the financing law, there are warnings that the adjustment should be greater.
According to the Autonomous Fiscal Rule Committee, The pace of Government spending is not consistent with the Nation’s income and because of this, compliance with the fiscal rule is once again at risk.
“A fiscal adjustment of $52 billion (2.9 points of GDP) is required to comply with the fiscal rule regarding the PGN 2025. The final fiscal indicators of this year will impact the situation in 2025. The gap between the expected collection and the goal of tax revenues for 2024, which was used to program the PGN 2025, translates into a lower income base compared to what had been projected,” they stated.
Trade.
AFP
Meanwhile, various analyzes in the market indicate that this adjustment for 2025 should be at least $30 billion, while Casa de Nariño insists on risking measures such as a tax reform, which does not convince the market either.
Through several messages on their social networks, The Minister of Finance, Diego Guevara, announced that debt payment is one of his first objectives for this year and recalled that it has not been easy for them due to the high levels of debt that limit the margin for action.
When carrying out a first review of the official decree issued by the Ministry of Finance, Portafolio was able to verify that the same errors that had the Budget in check in 2024 are repeated, since global items were once again left in several sectors such as infrastructure.
Consumption will boost the economy
Overcoming unequal growth between sectors, strengthening investor confidence, solving cash squeezes and ensuring compliance with the fiscal rule, are some of the tasks with which 2025 began in economic matters.
In all this, The study centers say that consumption will be the protagonist and that GDP growth will be driven by private consumption in durable, semi-durable goods and services from 2025, and by fixed investment in infrastructure, machinery and housing.
The projections highlight that inflation would be 3.1% this year and that this will translate into lower interest rates that will encourage the appetite for credit among Colombians, generating favorable dynamism in sectors such as commerce and, incidentally, in the industry, which they have lived several months to forget.
Interest rate
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Camilo Pérez, head of Economic Research at the bank, explained that “So far the consumer has recovered more than the economy in general. After all that period, pandemic and post-pandemic, finally, consumption patterns have been adjusted and we are now targeting retail trade, retail sales, with growth, after a long time of declines, generating a perspective favorable”.
Thus, an environment of tranquility must be generated that strengthens confidence and allows the Bank of the Republic to continue lowering interest rates.
Read: 2025 would be another year of modest economic growth and challenges to overcome
