May 19, 2024
Colombian economy

IMF, World Bank Foresee 2.6%/2.5% GDP Growth for Colombia in 2017

The International Monetary Fund (IMF) and the World Bank this month issued nearly identical 2.6% and 2.5% growth projections for Colombia gross domestic product (GDP) in 2017.

According to the IMF forecast – divulged in a new report on Latin American economies – Colombia’s 2.6% growth rate projection for 2017 is more than three-times the 0.8% growth rate foreseen for all of South America combined.

However, Colombia’s GDP growth in 2017 would be slightly below the 2.9% growth rate average in South America if “contracting” countries including Venezuela and Ecuador were to be excluded from the pool.

In contrast to democratic, capitalist Colombia, Venezuela is on a disastrous economic course thanks to its “socialist” economy now run by what amounts to a military dictatorship with a flimsy democratic façade. Ecuador likewise continues to suffer from over-dependence on Chinese cash-for-oil, which props-up an economy that is overwhelmingly dominated by government spending and authoritarianism, rather than democratic capitalism.

“In Colombia, timely monetary and fiscal tightening have supported a faster-than-expected narrowing of the current account deficit, hence reducing external risks,” according to the IMF report.

“Economic activity has been somewhat weaker than previously anticipated, growing by 0.3 percentage points lower in 2016 than projected earlier, and inflation pressures are dissipating gradually. Medium-term growth will be reinforced by the recently signed peace agreement [between the national government and the narco-terrorist FARC group] and a structural tax reform, which will create space for key infrastructure and social spending,” the IMF concludes.

Meanwhile, the World Bank’s latest economic forecast for 2017 – included in its January 2017 Global Economic Prospects report — sees Colombia’s 2.5% GDP growth as slightly lower than the 2.7% growth rate foreseen for the entire world this year.

“Emerging market and developing economy commodity exporters are expected to expand by 2.3% in 2017 after an almost negligible 0.3% pace in 2016, as commodity prices gradually recover and as Russia and Brazil resume growing after recessions,” according to the World Bank report.

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