The International Monetary Fund (IMF) delivered the conclusions of his annual official visit or ‘mission’ in Colombia, also called ‘Chapter IV’, in which the entity highlighted the pressures that are still maintained in the global environment, the challenges related to the high level of fiscal deficit and inflation, as well as the reforms in several areas that the government advances.
The IMF highlighted in the conclusions of the visit that global conditions continue to pose challenges post-pandemicsuch as Russia’s war in Ukraine and its consequences on world food and energy prices, which has also tightened global financial conditions.
In the conclusions of the mission it was highlighted that, despite the challenges, the Colombian economy exceeded expectations in 2022, and grew at one of the fastest rates among emerging economies, but that simultaneously, internal imbalances have also widened and external.
(Also read: World economy will slow down, but will not go into recession: IMF.)
Ceyda Oner, head of the IMF mission for Colombia, indicated that Colombia ended 2022 with one of the strongest positions among many emerging markets, but also reiterated that “inflation continues to be high, and continues to increase month by month. Parallel to the high rate of inflation at the national level, we see a large external imbalance.”
The IMF spokesperson spoke about how the Colombian economy is undergoing a necessary transition towards a more sustainable path of growth, but that downside risks also prevail.
(Also read: For the IMF, the Colombian economy will grow only 1.1% in 2023.)
According to the economist, Banco de la República interest rates have been gradually increasingand this “It’s a significant increase that will help reduce the inflation rate.”
Oner also mentioned that future risks persist both globally and nationally, and that in this context, macroeconomic policies are “they are hardening adequately.”
(Also read: The IMF and its ‘recipe’ to curb fragmentation and the global crisis.)
Among other conclusions presented by the IMF in its report, it is highlighted that “The fiscal adjustment planned for 2023 is welcome, and the increase in revenue also contributes to the inclusion goals.”
He also mentioned that “the financial sector remains liquid and well capitalized; policy measures have helped moderate strong credit growth” and that “A well-designed and executed energy transition and export diversification plan is vital to ensure sustainability and resilience in the medium term”.
Besides, the IMF spoke of the need to proceed prudently with structural reforms within Colombia’s strong policy frameworks and how this can foster a successful and lasting transition to a more equitable and green economy.
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