IMF forecasts on Colombia’s GDP in the next 5 years | Finance | Economy

It is no secret to anyone that the Colombian economy will have a good year in 2021. Depending on the entity that makes the forecast, it is expected that the national GDP grows more than 7% and even almost 10%. However, the question does arise what dynamism will the country have going forward when the statistical effect of the pandemic has already disappeared.

The International Monetary Fund (IMF) answered this question this week by updating its economic forecasts for Colombia for the next few years, until 2026. And in these, precisely, it shows that the country will not grow less than 3.3% (in 2023 ) in this period and that will gradually improve later. That is to say, it would once again register rates of advance similar to those of before the crisis, which were among the best in Latin America.

(See: The Fome has more than $ 7 billion to execute: what would it be used for?).

Worse prospects would show the recovery in the size of the economy. Although some reports suggest that this year or next Colombia would already be able to exceed the level prior to the arrival of the pandemic, according to IMF data that would actually be achieved in 2023. This is because while in 2019 the GDP added up US $ 323,380 million, this year it would end at US $ 330,790 million and it would be that year when it would reach US $ 336,250 million.

It should be noted, however, that the dynamism of Colombia over the next few years it would allow the country to practically touch, in 2026, US $ 400,000 million, by marking US $ 393,680 million in that year.

A more negative note shows the indicator of GDP per capita, because according to the Fund, it would be possible to exceed the figure prior to the pandemic in the next 2024. To delve into this data, it is necessary to mention that while this was US $ 6,550 in 2019 , will finish this exercise in US $ 5,890 and would reach US $ 6,720 within three years.

(See: Recovery of formal employment rebounded in large capitals).

UNEMPLOYMENT, THE LUNAR

As is being seen today, despite the fact that significant growth in the national economy is expected in 2021, the improvement in unemployment indicators is taking place at a very different speed, and this is a trend that will also continue during the next years.

So much so that, really, at least until next 2026, Colombia would not be able to have a single unemployment figure again and, even, it would remain at all times above 11% in this indicator.

(See: Map: IMF economic projections for Colombia and South America).

According to the IMF figures, this unemployment rate would be 14.5% this year, to drop to 13.8% in 2022, to 13.1% in 2023, 12.4% in 2024, 11.8% in 2025 and, finally, it would decrease to 11.1% in 2026.

Also, another of the forecasts that could be most requested when it comes to knowing what the path of the national economy will be during the coming years is that of inflation, which is currently skyrocketing in the world, and in Colombia. it widely surpassed the high range of Banco de la República, marking 4.5% in annual terms.

(See: Colombia, ranked 67th most innovative economies out of 132 countries).

Along these lines, the IMF does see high inflation for this year, which would end in 2021 at 4.3% (in its annual measurement at the end of the period), but going forward it would moderate to 3.1% in 2022, to maintain a stable level of around 3% in the following years.

FISCAL PROBLEM

Currently, the fiscal issue is one of the main challenges facing the national economy, and precisely for this reason the Government carried out its new tax reform.

But the figures in this regard are somewhat bittersweet. On the one hand, it is important to note that, according to the IMF, there will be a small increase in the country’s income relative to GDP. This figure would be 27.3%, while it would rise to 29.62% in 2025, which would represent more than two percentage points of income at that time.

On the other hand, public debt, one of the main indicators that risk rating agencies take into account to define Colombia’s sovereign rating, will remain high during this period studied.

For the IMF, this year it will close at 66.7% of GDP, and will rise to 67.6% in 2022 and to 69.7% in 2023. Of course, after that it will begin to improve to drop to 64.7% in by 2026.

(See: What’s next for Colombia after the tax on large companies?).

Finally, the forecasts on the balance of expenses and income of the Government show that there will be a deficit of 8.4% this year, but which will improve forward to 6.4% next year, to drop to 2.8% in 2024 and to 1.8% in 2026.

IMF ASKS TO CONTINUE MONITORING HIGH INFLATION

The IMF urged central banks to be “vigilant” in case expectations get out of control, although he insisted that the problems in global supply chains and inflation are of a “transitory” nature as the economy reactivates after the pandemic. This was expressed at a press conference by Magdalena Andersson, president of the Fund’s financial committee, together with the managing director of the organization, Kristalina Georgieva, within the framework of its annual meeting.

When there is a disparity between demand and supply, it is not able to face it, that puts pressure on prices, “said Andersson, who considered that it is something” positive “because it shows that” trade is recovering.”.

RUBÉN LÓPEZ PÉREZ
Portfolio General Editor
On Twitter: @rlopezper

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