Monday, March 8, 2021

Become part of our community

captcha 
Treasury Ministry Expert Committee Fears Sharp Downturn for Colombia Economy Treasury Ministry Expert Committee Fears Sharp Downturn for Colombia Economy Graphic Source: Pixabay

Treasury Ministry Advisory Committee: Coronavirus Could Cause 5.5% Decline in Colombia Economy This Year

Rate this item
(1 Vote)

Colombia’s Treasury Ministry revealed May 4 that its own “Fiscal Rule Advisory Committee” of economic analysts now fears that the Colombian economy could shrink by 5.5% this year because of the Coronavirus crisis.

The “CCRF” Committee (“Comité Consultivo de la Regla Fiscal”) just undertook a new sensitivity analysis of the behavior of fiscal variables under different scenarios of economic growth, according to the Ministry announcement.

Rationale: “Unusual uncertainty that prevails in the world macroeconomic outlook,” according to the official CCRF report (see: http://www.urf.gov.co/webcenter/ShowProperty?nodeId=%2FConexionContent%2FWCC_CLUSTER-129797%2F%2FidcPrimaryFile&revision=latestreleased).

“According to the most likely economic growth scenario estimated by the government, productive activity would contract 5.5% in 2020. This figure is consistent with a fiscal deficit target of 6.1% of GDP, given the Committee's decision to support the activation of the countercyclical spending clause . . .

“The deterioration of the fiscal balance [in 2020] compared to 2019 is due both to the extraordinary spending needs derived from the health crisis and economic emergency, and to the significant reduction projected in the tax collection.

“The difficult liquidity situation facing the business sector today is expected to deepen the negative effect that low economic growth usually generates on government revenues.

“Likewise, the Committee emphasizes the importance of the government presenting a path of fiscal adjustment for the coming years, which guarantees the sustainability of public finances.

“The strategy must integrate elements of rationalization and targeting of subsidies, the dismantling of countercyclical spending and measures aimed at increasing government revenues,” the report concludes.

Read 617 times Last modified on Tuesday, 05 May 2020 11:26

Leave a comment

Make sure you enter all the required information, indicated by an asterisk (*). HTML code is not allowed.

About Medellin Herald

Medellin Herald is a locally produced, English-language news and advisory service uniquely focused upon a more-mature audience of visitors, investors, conference and trade-show attendees, property buyers, expats, retirees, volunteers and nature lovers.

U.S. native Roberto Peckham, who founded Medellin Herald in 2015, has been residing in metro Medellin since 2005 and has traveled regularly and extensively throughout Colombia since 1981.

Medellin Herald welcomes your editorial contributions, comments and story-idea suggestions. Send us a message using the "contact" section.

Contact US

logo def
Medellin Herald: Find news, information, reviews and opinion on business, events, conferences, congresses, education, real estate, investing, retiring and more.
  • COL (4) 386 06 27
  • USA (1) 305 517 76 35
  •  www.medellinherald.com 
  •  This email address is being protected from spambots. You need JavaScript enabled to view it. 
  • Medellin, Antioquia, Colombia

Medellín Photo Galery

Medellin, contrasting colors and styles by Gabriel Buitrago

MPGMPGMPGMPGMPGMPGMPGMPGMPGMPGMPGnav