Colombia’s economy shows growth in 2022 and a slight slowdown in 2023
2023.02.09 12:13
Colombia’s economy shows growth in 2022 and a slight slowdown in 2023
By Kristina Sobol
Budrigannews.com – In 2022, Colombia’s economy will have experienced significant growth for the second consecutive year. However, this year’s expansion will be sluggish due to persistent inflation and high interest rates.
According to the median estimate of 19 analysts, the South American nation’s gross domestic product will have increased by 7.9% in the previous year, down from 10.8% in 2021 as it recovered from the coronavirus pandemic.
The estimates from the people who were surveyed ranged from 7.8 percent to 8.3 percent, which is roughly in line with the government’s and the central bank’s predictions of growth of 8% for the entire year.
On February 15, the number will be made public by the DANE statistic agency.
According to a report published by the economic think tank ANIF, “a good portion of growth was the reflection of soaring domestic demand, which was sustained in large part by credit and which only began to diminish at the end of the year, when the contractive monetary policy of the bank began to take effect.”
Analysts predicted that Colombia’s economy would grow by 4% in the fourth quarter, indicating a slowing expansion that is likely to continue as interest rates rise.
“Despite high inflation and central bank tightening for the majority of the year, economic activity in Colombia surprised to the upside in 2022. However, “good things rarely last in Latin America,” stated Andres Abadia, Pantheon Macroeconomics’ chief Latin American economist.
He went on to say, “Recent data confirm that growth is slowing sequentially as increased political and policy uncertainty, high inflation, and elevated financing costs finally take a toll.”
As inflation reached a high of 13.25% in the year to January, the central bank has increased borrowing costs by a total of 1,100 points to 12.75%, its highest rate since November 1999.
The respondents predicted that the economy would expand by 1.05 percent this year, which is significantly higher than the technical team at the central bank, which revised its prediction down to 0.2% in January.
