Colombian economy to moderate after impressive rebound

Significance

The OECD similarly raised its forecast for Colombia this month to 9.5%, from 7.6% previously. The optimism follows impressive growth of 17.6% and 13.2% year-on-year in the second and third quarters, according to national statistics agency DANE, as the economy emerges from the paralysis brought about by the COVID-19 pandemic.

Impacts

• The banking sector has proven resilient during the pandemic; solvency risks will remain low and no recapitalisation needs are expected.
• Additional social, health and education spending will be needed to reverse a sharp increase in the poverty rate, now 43%.
• Security problems will continue to threaten Colombia’s social and economic development.
• Congress will remain fragmented after the March legislative elections, making consensus-building crucial to the passing of legislation.