[Economics] Colombian economy is heading for a "more sustainable growth", according to the IMF

[Draeno]

 

Washington (AFP) – The Colombian economy "is undergoing a necessary transition towards more sustainable growth," the International Monetary Fund (IMF) said Thursday, praising the goal of reducing dependence on oil and coal.

The IMF expects the Latin American country to grow by 1% in 2023 after the 7.5% registered in 2022.

In a context of solid recovery, the headline level of inflation stood at 13.3% year-on-year in February 2023 and the current account deficit grew from 5.6% of GDP in 2021 to 6.2% in 2022, reports .

"Downside risks remain and are high, but Colombia's economic fundamentals, policies and policy frameworks are extremely strong," the executive board maintains, concurring with the staff's assessment.

At the external level, the tightening of global financial conditions "could be more accentuated than expected" and "internal risks cannot be ruled out", adds the IMF, which recommends managing the reforms "with prudence".

Remember that the two-year agreement within the framework of the Flexible Credit Line (LCF), with access to approximately 9.8 billion dollars, which was approved in April 2022, provides, as a precaution, additional external reserves against scenarios of extreme risks.

The Fund congratulates the government "for the remarkable strength of its policies and institutional frameworks" that help "to correct macroeconomic imbalances, while improving equity and social inclusion."

But he considers it "important to maintain efforts to gradually eliminate fuel subsidies that generate distortions." For the transition to be effective, "a gradual plan" is needed, he recommends.

The financial sector for its part "continues to be resilient," but the board emphasizes "the need to carefully monitor emerging risks and vulnerabilities."

 

https://www.france24.com/es/minuto-a-minuto/20230323-economía-de-colombia-se-encamina-a-un-crecimiento-más-sostenible-según-fmi