Uribe: Economic growth could slow to under 4%

Colombian President Álvaro Uribe said economic growth could slow to
under 4 percent this year, an “unpleasant surprise,” that cannot be
ruled out.

Uribe said that without an interest rate cut the economy could slow
more than expected and hinder job creation, according to comments
e-mailed last night. The unemployment data in July was “a warning
signal,” Uribe said. The government forecasts economic growth of 5
percent for 2008.

The central bank should consider cutting the overnight interbank
rate, which stands at 10 percent after 16 increases since April 2006,
Uribe said. Colombia’s inflation rate is among the lowest in Latin
America “despite recent increases.”

Annual inflation quickened to 7.87 percent in August, above the
central bank’s target range of 3.5 percent to 4.5 percent. Colombia’s
urban jobless rate rose to 11.9 percent in July.

“The central bank should consider that persistent high interest
rates could prevent the dynamic recovery in the economy we need,” Uribe
said according to the statement. (Bloomberg)

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