Colombia: 2022 Article IV Consultation—Press Release; Staff Report; and Statement by the Executive Director for Colombia
IMF Staff Country Reports, April 4, 2022
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- Colombia: 2022 Article IV Consultation—Press Release; Staff Report; and Statement by the Executive Director for Colombia
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- Published: April 4, 2022
- Series: IMF Staff Country Reports
Overview
- Colombia’s economy rebounded strongly in 2021 with 10.6 percent growth, led by pent-up domestic demand, notably private consumption.
- Around 66 percent of the population is fully vaccinated against Covid-19 as of end-February and the economy continues to reopen more fully.
- GDP has already reached pre-pandemic levels, but employment has lagged its recovery and macroeconomic imbalances have emerged.
Economic performance and drivers (2021)
- Growth: 10.6 percent in 2021, driven by pent-up domestic demand and private consumption.
- Inflation: Rising inflation exceeded the upper limit of the central bank’s tolerance range in 2021 amid strong demand, supply constraints, and rising commodity prices.
- Current account: The current account deficit widened to 5¾ percent of GDP due to demand-led growth and higher import prices.
- Labor market: Employment recovery has trailed the recovery in GDP.
Projections and near-term outlook (staff assumptions)
- Growth outlook: Under staff’s assumptions for the evolution of the pandemic, above-potential growth around 5½ percent is expected in 2022, led by robust household consumption and a continued recovery of investment and exports.
- Reopening: Continued reopening supported by vaccination progress (66 percent fully vaccinated as of end-February).
External and financial vulnerabilities
- External vulnerabilities remain elevated with high external financing needs and tighter financial conditions.
- External risks: An intensification of the ongoing conflict in Ukraine may impart considerable volatility in financial and commodity markets.
Domestic risks and implementation challenges
- Domestic risks are tilted to the downside, including:
- Uncertainty around the evolution of the pandemic.
- Political uncertainty with national elections this year.
- Slower implementation of the infrastructure agenda and peace accords.
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