The central bank of Colombia has forecasted the nation’s gross domestic product (GDP) to grow by 2.7% in 2018, a rate slightly below higher projections from the World Bank and International Monetary Fund (IMF).
The prediction, released this week following the Banco de la República’s January meeting, included caution about “uncertainty over” the economy’s “pace of recovery.”
Still, the central bank has seen positive signs in various forms, including the currency benefits for the peso amid a weakened dollar, higher external demand, and a recovery in oil prices.
“Should this trend continue,” stated the central bank, “the country’s terms of trade would continue improving and, together with the better dynamics expected from external demand, would continue to favor the recovery of the country’s external income.”
“In Colombia, growth has picked up gradually as the negative effects of the large fall in oil prices of 2014-16 fade,” wrote Alejandro Werner, director of the Western Hemisphere for the IMF, in a regional analysis. “Falling inflation has made room for growth-supporting monetary easing. Against a background of improving global growth and rising oil prices, the outlook is for a strengthening of the recovery and continued convergence of inflation to the target.”
Looking further ahead, the IMF projects 3.6% expansion for Colombia in 2019.
The World Bank’s longer-term forecast is for the Colombian economy to grow by 3.4% in both 2019 and 2020.
“Growth in Colombia is expected to pick up through the forecast period as moderating inflation supports private consumption, export growth recovers on rising oil prices, the 4G road infrastructure program is executed, and structural reforms to enhance competitiveness and foster diversification are implemented,” stated the World Bank in its “Global Economic Prospects” report.
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