Entries for 'Colombia'

Revenue shortfalls will contribute to wider fiscal deficits in 2024-25. Meeting the targets will require sizable expenditure cuts, which seem tough to implement. Higher borrowing costs relative to regional norms further limit the maneuvering space.

Colombia’s large current account deficit has narrowed this year. Sharp import compression has been driven by monetary policy tightening. “True” FDI, among the highest in LatAm, has continued to finance the deficit.

The government submitted to Congress a long-awaited pension reform bill. We survey the main independent and official reviews on the proposal, focusing on the fiscal impact. While the reform introduces improvements in coverage, equity and sufficiency, these gains come at a steep fiscal cost.

The Colombian peso has seen a plunge this year amid global and local factors. External and fiscal imbalances remain wide despite a windfall from commodity exports. Uncertain policy plans of the incoming administration have exacerbated FX pressure.

Chile and Colombia ran very wide twin deficits last year, … and their economies overheated due to policy stimulus. Very different fiscal policy wi...

Colombia ran the widest current account deficit in EM last year, … and imports remained extraordinarily strong in January-February. High commodity...

Rising inflation has forced major LatAm central banks to hike forcefully. A bottom-up analysis of inflation shows that the inflation surge has been broad-based across CPI baskets, suggesting demand-pull factors. Sustained inflation momentum in Mexico is tough to reconcile with the weak recovery.

We project moderate current account deficits despite strong imports. Nonresident capital flows will rebound this year, particularly in Brazil and Chile, and foreign reserves will improve supported by IMF SDR allocation. We see capital flows gradually slowing amid tighter global liquidity conditions.

LatAm central banks have accelerated monetary policy normalization. We expect Brazil and Andean countries to hike faster than market expectations, with Mexico remaining more dovish amid a negative output gap. Risks are tilted up due to potentially worsening global conditions and higher fiscal risk.

Colombia’s current account deficit rose above 5% in 21H1, … driven by increasing imports and continued services deficits. Preliminary data suggest...

LatAm countries have been forced to partially extend fiscal policy support this year amid increased social demands. Maintaining some stimulus while sustaining investor confidence has proven challenging. Fragile public finances could result in undue pressure on monetary policy, weighing on growth. 

Inflation has picked up amid high commodity prices, supply disruptions, and uneven growth recovery. Scope to postpone monetary policy normalization has rapidly narrowed, and we see most countries hiking this year. Persistent fiscal fragility could complicate orderly unwinding of monetary stimulus.

Colombia plans long-lasting public spending increases, … at a time when most EMs are trying to reduce fiscal deficits. Ambitious revenue raising p...

In Peru, the upcoming runoff could result in a radical policy shift to the left, weighing on the currency despite a strong growth rebound and high copper prices. In Colombia, an ambitious fiscal reform has triggered protests and social unrest, which makes keeping investment-grade status less likely. 

Colombia will widen its fiscal deficit this year to support growth. Even with tax reform, a much lower deficit in 2022 will be tough, …  and requi...

Colombia’s current account deficit remained wide in 2020, … and will not shrink this year under expansionary fiscal policy. FDI and external bonds...

COVID-19 has exacerbated regional labor market vulnerability, and lockdowns have worsened the deterioration in employment conditions. Uneven losses across formal and informal sectors suggest declining job quality. Slow post-lockdown job growth raises fears of a jobless recovery in some countries. 

We project a real GDP contraction of 7.5% in 2020 and a modest rebound in 2021. Tourism remains depressed, but remittances have surpassed pre-COVID-19 levels. SLV, JAM, and PAN are set to endure the steepest recessions, while GTM should contract the least due to its stable macroeconomic framework. 

The BoP correction has been remarkable amid activity collapse and exchange rate flexibility. Current account adjustment helped protect reserves desp...