In a new interview, Colombian Finance Minister Mauricio Cárdenas said that “the worst has already passed” for nation’s economy. Speaking to La República, a leading business publication in Bogotá, he said that 2016 was in many ways worse than the prior year due to the tense political climate surrounding Colombia’s peace process and tax reform, along with other extenuating circumstances that didn’t rear their head during 2015, when the downturn began in earnest following a major fall in global oil prices.
“I don’t have the slightest doubt that the worst has already passed and that perhaps the most serious damage occurred in 2016, because not only was it due to oil but also the phenomenon of El Niño and the trucker strike, and as well as uncertainty about peace and tax reform,” Cárdenas told La República.
Photo: Mauricio Cárdenas, seen here speaking at an IMF event in Medellín last year, expects improvement this year on the 2.5% GDP expansion of 2016, but admits the downturn will still prevent Colombia from returning to the 4.5% growth he expects to see again in the future. (Credit: IMF)
The minister, who calls himself a “realistic optimist” about the economy, said that, “we had a difficult time, and we must not deny it.” But he also noted that the downturn was in many ways unavoidable and has largely been caused by the drastic fall in the price of oil, which has accounted for up to two-thirds of Colombian exports in recent years.
He also pointed out that the country has navigated the devaluation in commodities prices relatively well, with an economic growth last year that outpaced Brazil, Argentina, and Chile. “The country assimilated surprisingly well because we did not fall into a recession,” Cárdenas told La República.
Cárdenas is currently projecting the GDP to grow by around 2.5% in 2017, which is better than the 2.0% seen in 2016 but well below the highs seen during the commodity boom — and the recharged growth of around 4.5% that Cárdenas believes is still ahead in the future.
“The year 2017 will be better and with more growth, but we are still not in top form,” he told La República. “We are still not going to have the ideal and optimum growth to which we aspire, which is 4.5%. This year we will not reach 4.5%, but it will be better than last year.”