## Press Release: IMF Approves Three-Year Extended Fund Facility for Colombia _IMF News, December 20, 1999_ ## Source details **Canonical URL:** [Press Release: IMF Approves Three-Year Extended Fund Facility for Colombia](https://www.imf.org/en/news/articles/2015/09/14/01/49/pr9963) ## Other formats - [Markdown version](/en/news/articles/2015/09/14/01/49/pr9963/index.md) - [Structured JSON version](/en/news/articles/2015/09/14/01/49/pr9963/index.json) - [Bundle manifest](/en/news/articles/2015/09/14/01/49/pr9963/bundle-manifest.json) ## Bibliographic details - Published: December 20, 1999 --- ### Approval and purpose - The International Monetary Fund approved a three-year credit for Colombia equivalent to SDR 1.957 billion (about US$2.7 billion) under the Extended Fund Facility (EFF) to support the government's economic reform program for 1999-2002. - The EFF repayment terms: 10 years with a 4 ½-year grace period; the interest rate, adjusted weekly, is currently about 4.30 a year.1 ### Executive Board commentary (Stanley Fischer) - Recent deterioration in Colombia's economic performance attributed to weak fiscal policies, adverse external shocks, and a difficult internal security situation. - Directors commended recent corrective measures and endorsed the medium-term economic program. - Critical policy emphases: - Substantial fiscal consolidation. - Acceleration of structural reform agenda, with higher priority on restructuring the financial sector. - Pursuit of a flexible exchange rate policy. - Fiscal-strengthening prerequisites identified: - Tight spending policies. - Strong tax enforcement. - Improved control of resources under the fiscal decentralization system. - Economic recovery. - Directors welcomed incorporation of new social safety net programs to help protect gains in social spending. - Floating the peso was considered appropriate; under the floating exchange rate regime, central bank intervention limited to achieving balance of payment objectives and maintaining orderly market conditions. - Expectation that inflation targeting will increasingly provide the nominal anchor with the shift to a floating exchange rate. - Financial sector restructuring measures highlighted: - Deal with public bank problems through recapitalization and divestment. - Recapitalize viable private banks. - Provide relief to the mortgage sector. - Fiscal cost of these financial sector operations has been included in the program. ### Program objectives and macroeconomic framework - Program objectives: restore economic growth, reduce inflation further, and achieve a sustainable external position. - Key program components: strong fiscal consolidation, financial sector restructuring, structural reforms, flexible exchange rate policy. - Growth and inflation targets: - Restore real GDP growth to 3% in 2000 and nearly 5% by 2002. - Inflation declining from 10% to 6% respectively. - External position: - External current account deficit expected to increase somewhat in 2000 to 2.4% of GDP, then stabilize subsequently at just above 3% of GDP. - Maintain Colombia's external debt (public and private) at 43-44% of GDP. - Under the floating exchange rate regime, central bank will intervene only to meet the targeted increase in net international reserves (NIR) and to maintain orderly market conditions. ### Fiscal program and social protection - Fiscal target for 2000: reduction in the nonfinancial public sector (NFPS) deficit to 3.6 percent of GDP from an estimated 6.3 percent in 1999. - Fiscal consolidation built on: - Tight wage policy. - Strong tax enforcement. - Improved control of resources under fiscal decentralization. - Economic recovery. - Structural reform agenda includes: - Strengthen finances of territorial governments. - Streamline the revenue sharing system. - Reform public pension systems. - Downsize the public sector, mainly through privatization. - Reform the tax system. - While reducing public sector spending relative to GDP, introduce new social safety net programs to preserve gains in social spending. ### Selected economic and financial indicators (highlights from table) - Real GDP (percentage changes): 1995: 5.2; 1996: 2.1; 1997: 3.2; 1998: 0.4; 1999: -3.5; 2000: 3.0; 2001: 3.8; 2002: 4.8. - GDP deflator: 1995: 18.9; 1996: 16.9; 1997: 17.0; 1998: 16.7; 1999: 11.6; 2000: 11.5; 2001: 8.8; 2002: 7.0. - Consumer prices (average): 1995: 20.9; 1996: 20.8; 1997: 18.5; 1998: 18.7; 1999: 11.3; 2000: 11.2. - Consumer prices (end of period): 1995: 19.5; 1996: 21.6; 1997: 17.7; 1998: 11.0; 1999: 10.0; 2000: 8.0; 2001: 6.0. - Exports (f.o.b., percent change): 1995: 16.2; 1996: 4.0; 1997: 10.1; 1998: -5.8; 1999: 8.9; 2000: 9.2; 2001: 1.1. - Imports (f.o.b., percent change): 1995: 16.5; 1996: -0.6; 1997: 12.8; 1998: -5.2; 1999: -29.8; 2000: 20.2; 2001: 4.2; 2002: 3.9. - Export volume: 1995: 2.5; 1996: -2.3; 1997: 6.6; 1998: 5.4; 1999: 5.1; 2000: 2.2; 2001: 4.1. - Import volume: 1995: 2.0; 1996: 21.7; 1997: -1.4; 1998: -28.9; 1999: 18.4; 2000: 1.7. - Central administration revenue (percent of GDP): 1995: 23.9; 1996: 23.0; 1997: 27.9; 1998: 9.8; 1999: 20.7; 2000: 19.2. - Central administration expenditure (percent of GDP): 1995: 38.0; 1996: 36.0; 1997: 24.3; 1998: 20.4; 1999: 5.7; 2000: 12.6; 2001: 9.0. - Broad money (percent change): 1995: 27.3; 1996: 30.0; 1997: 24.5; 1998: 10.3; 1999: 18.2; 2000: 14.4; 2001: 13.1. - Private sector credit (percent change): 1995: 30.5; 1996: 8.2; 1997: 14.1; 1998: 15.7. - Interest rate (90-day time deposits) — Nominal: 1995: 32.4; 1996: 27.8; 1997: 33.9. Real: 1995: 10.8; 1996: 5.3; 1997: 14.7. - Central administration balance (percent of GDP): 1995: -2.8; 1996: -7.1; 1997: -5.0; 1998: -4.2. - Public sector savings (percent of GDP): 1995: 6.3; 1996: 5.8; 1997: 4.4; 1998: 5.6. - Nonfinancial public sector balance (percent of GDP): 1995: -0.8; 1996: -2.4; 1997: -3.7; 1998: -3.9; 1999: -6.3; 2000: -3.6; 2001: -2.5; 2002: -1.5. - Combined public sector balance (percent of GDP): 1995: -3.8; 1996: -3.1; 1997: -5.9; 1998: -1.3. - Foreign financing (percent of GDP): 1995: 1.2; 1996: 0.9; 1997: 0.6; 1998: 1.9; 1999: 1.4; 2000: 1.3; 2001: 1.0. - Public sector debt (percent of GDP): 1995: 26.3; 1996: 24.6; 1997: 24.2; 1998: 27.5; 1999: 34.2; 2000: 34.1; 2001: 33.8; 2002: 34.0. - Gross domestic investment (percent of GDP): 1995: 25.8; 1996: 22.2; 1997: 21.0; 1998: 19.6; 1999: 15.3; 2000: 22.0. - Gross national savings (percent of GDP): 1995: 17.3; 1996: 15.5; 1997: 13.7; 1998: 14.0; 1999: 16.0; 2000: 17.9; 2001: 18.8. - Current account (deficit -) (percent of GDP): 1995: -4.9; 1996: -5.5. - External debt (percent of GDP): 1995: 31.6; 1996: 31.5; 1997: 35.8; 1998: 41.1; 1999: 43.1; 2000: 43.6; 2001: 44.3. - Total short-term external debt to reserves: 1995: 49.9; 1996: 47.8; 1997: 52.7; 1998: 72.0; 1999: 57.2; 2000: 66.4; 2001: 58.4. - External debt service (percent of exports of goods, services and income): 1995: 22.9; 1996: 24.0; 1997: 23.2; 1998: 22.6; 1999: 21.1; 2000: 27.4. - Interest payments (percent of exports of goods, services and income): 1995: 8.7; 1996: 7.9; 1997: 8.4; 1998: 9.3; 1999: 7.1; 2000: 9.4; 2001: 6.9. - Overall balance of payments (in millions of U.S. dollars): 1995: 1; 1996: 1,722; 1997: 211; 1998: -1374; 1999: -750; 2000: 744; 2001: 326; 2002: 323. - Gross official reserves (in millions of U.S. dollars): 1995: 8,447; 1996: 9,938; 1997: 9,908; 1998: 8,741; 1999: 8,215; 2000: 9,458; 2001: 9,784; 2002: 10,107. - Gross official reserves (in months of imports of goods and services): 1995: 5.5; 1996: 6.2; 1997: 5.9; 1998: 5.9. ### Country IMF membership and quota - Colombia is an original member of the IMF; its quota is SDR 774 million (about US$1,063 million); and it has no outstanding use of IMF credit. *Source: Press Release No. 99/63 — IMF Approves Three-Year Extended Fund Facility for Colombia (December 20, 1999).* --- ## References - [Colombia and the IMF](http://www.imf.org/external/country/COL/index.htm) - [Press Releases](https://www.imf.org/en/news/searchnews) - [PRESS CENTER](http://presscenter.imf.org/) - [https://www.imf.org/en/home](https://www.imf.org/en/home) _Source: https://www.imf.org/en/news/articles/2015/09/14/01/49/pr9963_