[Economy] Davivienda expects the Colombian economy to grow 8% this year

[Akrapovic]

Despite the remaining impact of the pandemic, the bank sees impulses in low interest rates, the entry of remittances to the country and controlled levels of inflation.

 

 

At the launch of "El Libro" by Davivienda and Davivienda Corredores, the financial institution pointed out that with the reactivation and recovery of the country's economy, this year it will be possible to have a fairly significant growth in GDP.

According to the study, the Colombian economy will grow, in 2021, at an annual rate of over 8% favored by household consumption which, despite the remaining impact of the pandemic, has been driven by factors such as low interest rates. , the entry of remittances to the country and controlled levels of inflation.

However, by 2022 some of these factors, added to the base effect of comparison, will lead to a significant moderation in the growth rate of the Colombian economy, the experts indicated in the document.

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Banco Davivienda calle 72
Bogota August 23, 2021
Photo Guillermo Torres Reina / Week
This is how 2022 looks, according to experts from Davivienda
“In order to achieve a sustainable growth rate in the long term of the Colombian economy, it will be necessary for private investment to improve its dynamics; for this reason, the evolution of the political panorama in the country will be decisive in this objective, ”the researchers highlighted, facing the elections to Congress and the Presidency next year, which will mark the economic course of the country for the next four years.

It was also revealed that the dynamics of inflation at the global level and, especially in emerging economies, could represent the main challenge for central banks and a significant headwind to maintain the rate of economic growth experienced so far.

In recent months, the CPI in Colombia has been growing steadily, to the point that the latest data provided by Dane indicates that it is at 4.51%, a figure higher than the target range of Banco de la República, which is between 2% and 4%.

Another point analyzed was that of US stocks, measured by the S & P500 index, which are very close to historical highs and their value has multiplied by five times since 2009; However, to the extent that the North American economy continues its expansion path and the Federal Reserve rates remain in expansionary territory, the performance of this market could continue to be positive.

In this sense, the normalization of global monetary policy will be the main challenge for investors in the fixed income market both globally and locally and, to the extent that it is possible that during 2022 there will be the first increase in the rate of the FED, reason why the Colombian public debt will have very limited its space of valuation.

As for the rebound in raw material prices, especially oil, together with a faster-than-anticipated recovery in the economy and corporate profits, they would be the main reasons for observing stock appreciations in the coming months and beyond. 2022.

It is worth mentioning that at the moment, the price of the reference oil Brent is above US $ 80 per barrel, a price in itself quite favorable for producing countries, although some analyzes by financial entities suggest that crude could soar its price next year, until it exceeds the barrier of US $ 120 per barrel, as happened a couple of years ago, when this raw material reached over US $ 110 per unit.

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This, due to the production agreements and the greater demand that have been presented in recent months, which has triggered the price in the international market, which is quite favorable for Colombian finances.

 

LINK: https://www.semana.com/economia/macroeconomia/articulo/davivienda-preve-que-la-economia-colombiana-crecera-un-8-este-ano/202153/