Colombia’s GDP growth rate is expected to be 4.9% by the end of 2014, exceeding the world average as it has done every year this century except 2010, according to the economics website Portfolio.
According to the IMF, global economic growth in 2014 is expected to be around 3.3%, slightly lower than the forecasts emitted at the beginning of the year.
In 2013, Colombia’s GDP growth rate was 4.3%, while the global rate was just 2.4%, a disappointing peace of economic recovery.
FACT SHEET: Colombia GDP statistics
GDP growth rate
The chief economist of the BBVA bank in Colombia, Juana Tellez, believes that housing consumption and civil works will maintain the economic growth in the coming year.
Despite these predictions, several government officials have been warning that the Colombian economy could face trouble in 2015 as the price of oil drops worldwide.
MORE: Falling oil prices threaten Colombian economy
Oil prices have fallen nearly 18% so far this year amid Colombia’s first recorded oil production shortfall in over a decade. Three months ago, Mauricio Cardenas, Colombia’s finance minister, said in an interview with Caracol Radio that it “is essential for Colombia that oil prices will not fall much below $ 100 per barrel.”
Current oil prices stand at around 95$ per barrel.
Another concern raised by Tellez is that the tax reform proposed by the Santos administration will not provide the necessary resources to attend to the financial commitments the Colombian government will have in the coming years.
The Colombian government sent a tax bill to Congress earlier this year in which it proposes to raise taxes on the rich in order to close the fiscal gap for the 2015 national budget, decrease inequality and invest more in social development programs
MORE: Breaking down Colombia’s tax reform and new wealth tax
However, Fedesarrollo, an economic think-thank, has claimed that even after raising financial transaction and estate taxes, there will still be a deficit of around $2.5 billion. Furthermore, revenue from the financial transaction tax will fall off as the tax is already set to be reduced in 2015.
This conflicts with more optimistic calculations made by the Ministry of Finance which has estimated that the increased taxes will cover more than $5 billion of the budget gap.