중남미

Abstract

Prudent macroeconomic policies have underpinned Colombia’s strong growth during the last few years, which exceeded that of most Latin American peers. Last year, the economy posted real growth of 4.6 percent, and average inflation remained near the center of the target range. Monetary and fiscal policies were mildly supportive of growth. The infrastructure agenda is expected to advance this year. Colombia’s government is engaged in ongoing peace negotiations with the main guerilla group (FARC). Outlook and risks. Starting from a position with slightly positive output gap, Colombia faces a large adverse terms of trade shock. Staff projects growth to slow to 3.4 percent in 2015 and gradually rise toward its potential (around 4¼ percent) over the medium-term supported by the government’s PPP-based infrastructure program and a gradual recovery in oil prices and external demand. Risks are mainly on the downside, including higher interest rates and financial volatility, and a protracted period of slower growth in advanced and emerging economies, and a delayed implementation of the infrastructure program. Macroeconomic policies. Strong headwinds from the severe oil price decline pose significant challenges to the near-term economic outlook. The structural fiscal rule will only partially shield expenditure plans from the oil shock and some fiscal tightening will be required to accommodate lower-than-expected oil revenues. A broadly neutral monetary policy stance will be consistent with achieving the inflation target in the near- term. Medium-term challenges. Colombia’s key challenge will be preserving macroeconomic stability while sustaining strong and inclusive growth through structural reforms. Revenue mobilization is urgently required to protect key social and infrastructure spending while adhering to the medium-term fiscal rule targets amid less favorable external conditions (weaker terms of trade and tighter financing conditions).