[Economics] Bank study indicates that the Colombian economy will grow 0.7% and 1.8% between 2023 and 2024

[Draeno]

 

Through a report, BBVA Research released its economic projections for Colombia in the annual period between 2023 and 2024. The premise that will govern the two years will be a necessary slowdown to boost economic growth.

In the first place, the main projection is that the national economy will have a growth of 0.7% this year and 1.8% for 2024. These figures are located based on the vision that exists for the country, which is linked to a development in the medium term that will seek to reduce inflation rates.

Mauricio Hernández, an economist member of the BBVA Research team for Colombia, indicated that growth will be led by public consumption and the execution of civil works. Additionally, factors such as the recovery of non-residential buildings and the constancy in exports will also contribute to growth; especially in 2024.

However, not everything is positive. The balance emphasizes that this year private consumption will represent a slight loss, but from which it will recover in the next period. On the other hand, to reach these conclusions, the bank's analysts took into account the economic state of the country at the end of 2022.

Initially, in recent months they have noticed signs of an economic slowdown, largely evident in household spending on durable goods and the housing market. In addition, they detected that this phenomenon was also occurring in the labor market. In that order of ideas, the projection would be to continue under this trend; but what BBVA observes is that 2023 will be the opposite, being a period in which the previous slowdown will seek to have better numbers.

Going along the line of the labor market, the study highlights that the formal modality has been on the rise, with 800,000 citizens who took part in 2022. This aspect will contribute substantially to the projected growth.

Other relevant elements that were mentioned in the report were fiscal spending, which will increase this year, not only due to the larger national budget, but also due to the high execution of spending, especially in the framework of the regional elections in October.

Regarding inflation, the projection considers that there will be a gradual reduction. Specifically, they expect that by the end of the year, the general figure will be reduced to 9% and reach 5% in 2024. The root of this panorama will be the drop in food inflation, which will go from 27.8% (December 2022 value) to 7.6% at the end of the current year.

 

https://www.semana.com/economia/macroeconomia/articulo/estudio-bancario-indica-que-la-economia-colombiana-crecera-07-y-18-entre-2023-y-2024/202305/