World Bank raised Colombia’s GDP forecast in 2022

RIO DE JANEIRO, BRAZIL – The World Bank updated its growth forecast for Colombia this Thursday, raising it from 4.1% in January to 4.4%, despite the complex panorama facing the world due to high inflation and the war in Eastern Europe.

Likewise, the international organization delivered its upward forecasts for 2023 and 2024 of 3.5% and 3.3%, respectively. For the multilateral entity, the figures for the Colombian economy rebound are subject to the country maintaining the current reactivation path.

Among the economies that will grow at a similar rate to Colombia’s by 2022 are Ecuador (4.3%), Dominican Republic (5%), Bolivia (3.9%), and Saint Vincent and the Grenadines (4.2%).

On the other hand, Colombia ranks eighth out of a dozen Latin American economies that, to date, have accumulated GDP growth and are above the level before the covid-19 pandemic.

With 2.86%, the country is ahead of El Salvador (1.88%), Honduras (1.85%), Peru (0.93%), and Brazil (0.56%). Meanwhile, above Colombia are Costa Rica (3.22%), Paraguay (3.65%), and the Dominican Republic (4.75%).

A DOWNWARD REVISION FOR LATIN AMERICA

Latin America and the Caribbean will grow by 2.3% this year, thus allowing most countries to recover the losses generated by the pandemic amid a complex scenario of high inflation and the impacts of the war.

The World Bank made the statement in the presentation of the document ‘Consolidating the recovery: seizing the opportunities of green growth’.

“However, these modest projections place regional growth among the lowest in the world at a time when the region faces major uncertainties, such as the possible emergence of new variants of the coronavirus, an increase in inflationary pressure, and the war in Europe, which threatens the global recovery,” the agency said at a press conference.

The World Bank says the regional growth forecast was lowered by 0.4 percentage points following the Russian invasion of Ukraine. Previously, in January, the figure stood at 2.6%.

THE IMPACTS OF THE WAR

While the World Bank believes that higher prices will initially favor the region, they also expect the net effect to be contractionary, as oil prices affect the Caribbean and those that do not export crude oil.