Colombia’s government on Wednesday admitted what everybody already knew, the 3.6% economic growth target for this year will not be met.
In a forum organized by economic think tank Fedesarollo, Vice-Minister Juan Pablo Zarate admitted that this year’s economic growth would likely end up being 3.4%.
The IMF projected this growth in July already, but President Ivan Duque and Finance Minister Alberto Carrasquilla subsequently refused to acknowledge this.
The projected 3.4% growth is higher than the 3% projected by the central bank in August.
But Colombia’s economy appears to have been recovering faster than expected in the second and third quarter of the year when the country’s GDP grew an estimated 3.3% compared to the same period last year.
The lowered growth expectation is due to unforeseen global economic developments like the trade war between the United States and China, according to experts.
Zarate was adamant to stress that, compared to the rest of the region, “Colombia is an extraordinary case. We are the economy that by far grows fastest,” he was quoted as saying by economic newspaper Portfolio.
According to experts, part of this growth is due to the mass immigration of people from Venezuela, who have increased domestic consumption.
Global external demand is falling, growth prospects are worsening and the country’s economy moving in the opposite direction is quite positive. The very important trade growth of 5.9%, for a sector that accounts for about 18% of GDP, is fundamental and was a major driver of economic activity.
Fedesarollo director Luis Fernando Mejía via Portafolio
Because the economy grew only 2.8% in the first quarter and 3.4% in the second, it would have have to make a spurt in the fourth quarter to reach the 3.4% projected by both the IMF and the Duque administration.
A central bank survey held by the central bank last month indicated that economists find a 3.2% growth would be more likely.