[Economics] lights and shadows of the Colombian economy

[#Wittels-]

The president of ANIF and the director of Fedesarrollo, from their shores, lay bare the Colombian economy in a key year, both economically and politically. They talk about the reforms that cannot be postponed for the next national administration and project what will be the path of expansion for the Colombian GDP.

The directors of two of the main centers of economic thought, ANIF and Fedesarrollo, measure the pulse of the Colombian economy. In a virtual chat with Mauricio Santamaría, president of ANIF, and Luis Fernando Mejía, director of Fedesarrollo, the challenges that the country faces in terms of growth and how to face those challenges in a scenario of many choices were examined.

How much will the economy grow in 2021?

 

Mauricio Santamaría (MS): Let us remember that GDP grew 13.2% in the third quarter of 2021, a figure well above market expectations. In addition, the most recent results of the economy monitoring indicator (ISE) show that in November the added value of the economy grew 9.6% (compared to the same month of the previous year) and 9.9% so far this year. year until November. With these results, we expect the Colombian economy to achieve growth in a range of 9.7% and 10.1% for all of 2021.

Luis Fernando Mejía (LFM): We believe that the Colombian economy will expand at a rate of 9.5% in 2021 with a probable scenario where the expansion is a little higher than that 9.5%. It is a fairly important recovery and it is growth that is well above the average for Latin America, which, according to the Monetary Fund, grew 6.8% the previous year.

 

Discounting the rebound effect, what will be the real expansion of GDP in 2021?

MS: To estimate growth without the base effect created by the very low results of the previous year, we use 2019 as a pre-pandemic reference. Thus, when we calculate the percentage change in GDP for 2021 compared to 2019, we have a clearer picture of growth . For example, if the GDP of the first nine months (January-September) of 2021 is compared with the same period of 2019, both the original series and the series adjusted for seasonal and calendar effects show that the economy has grown by 1.5 % On the other hand, if our growth forecast of 9.9% for 2021 is fulfilled, the growth compared to 2019 would be 2.4%, with which we will have exceeded pre-pandemic levels.

 

LFM: Real expansion can basically be measured by discounting the size of the Colombian economy's GDP. That production of goods and services in 2021, compared to what it uses in the pre-pandemic, that is, in 2019. And based on a growth of 9.5%, this indicates that the size of the economy is 2% larger of what he used in 2019, so that could be like a measure of the real growth that we have had in the last two years. It does not sound high: however, I confirm that it is well above the recovery seen in Latin America, which on average was 6.5%.

 

For this year what is expected in terms of growth?

MS: With high probability and, in the absence of deep and long-lasting negative shocks, the economy will continue along the path of recovery that we have been observing, although at a slower pace. The speed of growth in 2021 was mainly marked by a base effect, product of the strong contraction of 6.8% in 2020. In the absence of favorable statistical base effects, the growth of the Colombian economy would be in a range of 4 % to 4.3% by 2022. We expect that growth to be driven by manufacturing, commerce, and social services.

 

LFM: We estimate that the economy is going to expand at a rate of 4.6%, where the two sectors that are going to be leading this growth are going to be commerce, with a contribution of 1.1 points, and industry, with 0.7 percentage points; that is, 1.8 percentage points between trade and industry, which represent 39% of total economic growth. This indicates that this year we are going to have a more balanced growth with other sectors contributing.

 

Link: https://www.elespectador.com/economia/luces-y-sombras-de-la-economia-colombiana/