Colombia has the region’s best growth estimates this year

In addition to the Colombian National Administrative Department of Statistics (DANE) second-quarter GDP growth report on August 16, parallel projections are seen in which Colombia stands out for having the best numbers in Latin America, but what is striking is that several international entities support that the local economy is the best performer in the region.

The summary is as follows: in the most conservative scenario, ECLAC estimates that this year Colombia will grow by 4.8%, the World Bank by 5.4% (3.2% in 2023 and 3.3% in 2024), and the local Bank of the Republic sees the indicator at 6%, the OECD 6.1% and 2.1% next year, and the most positive is the IMF with 6.3% and 3.5% for 2023.

In the case of the IMF, regarding Latin America and the Caribbean, the entity considers that a greater dynamic than expected will be registered, reaching an expansion of 3% this year and 2% next year, even though it concluded 2021 with a growth of 6.9%.

This behavior would be explained by the good dynamics of the most developed countries in the region; but also by the potential they see in Colombia, which is the highest in the region (in fact, of the strongest economies of the axis, in Mexico they foresee a 2.4% increase or Brazil 1.7%).

According to Alejandro Reyes, chief economist of Bbva Research, on the IMF publications, this year, the economies are energized by the rebound effects after the pandemic. “The opening has been gradual, and there are still sectors that are normalizing. Colombia is one of the best performing economies, followed by Chile and Brazil a little less so,” he added.

“The outlook has darkened significantly since April. The world could soon be on the brink of a global recession, just two years after the last one,” Pierre-Olivier Gourinchas, IMF chief economist, said in a blog accompanying the update’s release.

On the OECD side, just over a month ago, it upgraded 0.6 percentage points to 6.1% of its projection for Colombia’s Gross Domestic Product growth in 2022, compared to the 5.5% forecast in December last year. The agency stressed that in Colombia, private consumption is the primary driver of the recovery from the pandemic crisis, which has gradually boosted employment.

“Solid commodity prices have improved the terms of trade and support fiscal performance, in a context of increased external demand,” the OECD said in its report.

It adds that inflation in the country has risen well above the Bank of the Republic’s target, initially driven by food and energy prices, which have particularly affected low-income households. “More recently, however, inflationary pressures have become increasingly generalized,” says the OECD.

ANOTHER INCREASE FROM THE WORLD BANK

In June, the World Bank again raised its forecast for Colombia’s economic expansion this year and now estimates that the country’s GDP will grow 5.4%, up from the 4.4% it projected in April this year.

It is the multilateral organization’s best forecast for a Latin American economy after Panama, which predicts GDP growth of 6.3% this year. Among Latin American countries, Colombia is followed by the Dominican Republic (5.0%), Argentina (4.5%), Ecuador (3.7%), Guatemala (3.4%), and Costa Rica (3.4%).

With information from La República

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