ECLAC Forecasts Colombian Economy to Grow by 2.7% in 2018

The Colombian economy will make a significant recovery this year, finishing 2018 with a gross domestic product growth rate of 2.7%, according to the United Nations Economic Commission for Latin America and the Caribbean (ECLAC).

In its comprehensive mid-year report on the state of the regional economy, the Santiago, Chile-based organization highlighted the progress made so far in 2018 in Colombia and predicted that strong external and domestic demand will continue through the end of the year.

“The forecasts for 2018 and 2019 are promising,” stated ECLAC, “and are supported by stronger growth in Colombia’s trading partners,” including the United States, Europe, and the rest of Latin America.

“Economic tracking indicators and those that monitor industrial, commercial and consumer confidence have also been trending up,” added the organization in its report. “Low interest rates and weaker inflation can be expected to boost confidence and encourage investment, resulting in better use of productive resources, maintenance of household purchasing power and positive dynamics in credit, consumption and investment.”

In other areas, however, ECLAC expects worse results. Unemployment remains high, for example, and “ a further deterioration in the labour market is foreseen, albeit by less than in 2017,” according to the organization.

Uncertainty also persists around maintaining an inflation rate near 3% from a variety of factors, from food to the price of oil.

“Upside risks to inflation in 2018 could come from a rebound in food prices, if supply is reduced owing to weather problems, or if the current low prices discourage planting,” stated ECLAC. “Oil prices and the trend of the exchange rate are additional factors of uncertainty in terms of keeping inflation at 3.0%.”