{
  "title": "IMF Executive Board Concludes 2021 Article IV Consultation with Colombia",
  "publication": "IMF News, March 23, 2021",
  "sourceUrl": "https://www.imf.org/en/news/articles/2021/03/23/pr2178-colombia-imf-executive-board-concludes-2021-article-iv-consultation",
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  "summary": "The Executive Board of the International Monetary Fund concluded the Article IV consultation with Colombia on March 19, 2021.",
  "publishDate": "2021-03-23",
  "sections": [
    {
      "heading": "Overview",
      "content": "- The Executive Board of the International Monetary Fund concluded the Article IV consultation with Colombia on March 19, 2021.\n- Colombia experienced a severe social and economic toll from COVID-19, including more than 60,000 deaths and GDP contracting by 6.8 percent in 2020.\n- The authorities implemented a coordinated policy response using their strong policy framework, including a crisis mitigation fund, emergency measures supporting health care, households and businesses, a flexible exchange rate, monetary policy accommodation and liquidity support, temporary suspension of the fiscal rule, and macroprudential measures.\n- A national vaccination program covering most of the population started in February."
    },
    {
      "heading": "Economic impact and recovery projections",
      "content": "- 2020 GDP contraction: -6.8 percent.\n- Growth outlook: GDP is projected to rebound to around 5 percent in 2021 (staff projection: 5.1 percent).\n- Timing of return to pre-pandemic levels: not projected until the second half of 2022.\n- Labor market: Over 5 million jobs were temporarily affected; unemployment peaked and has partly rebounded though local lockdowns have recently dampened employment gains.\n- Risks: Both external and domestic risks to growth remain tilted to the downside."
    },
    {
      "heading": "Executive Board assessment and policy guidance",
      "content": "- Directors recognized Colombia’s very strong policy frameworks and track record that enabled a timely policy response to the pandemic.\n- Near-term policy stance: Emphasized the need for sustained policy support in the near term while safeguarding financial stability and medium-term fiscal sustainability.\n- Fiscal policy:\n  - Noted temporary suspension of the fiscal rule to accommodate emergency spending for health care, households, and firms.\n  - Recommended that emergency measures be gradually removed as the pandemic subsides.\n  - Welcomed the planned fiscal reform anchored in durable revenue mobilization and improved tax administration.\n  - Stressed return to the fiscal rule to anchor medium-term adjustment and public debt sustainability, balancing flexibility and credibility.\n  - Encouraged considering enhancements to the fiscal framework and its implementation.\n- Monetary and financial sector policy:\n  - Welcomed the central bank’s actions to provide liquidity and the balanced use of regulatory and supervisory flexibility to support credit.\n  - Noted that monetary policy can be eased further, if needed, but emphasized continued vigilance in financial supervision and use of macroprudential policies to safeguard financial stability.\n  - Welcomed the authorities’ commitment to maintain a flexible exchange rate.\n- External financing and reserves:\n  - Noted Colombia’s first-ever purchase under the Flexible Credit Line (FCL) complemented public and external financing and helped maintain strong external buffers.\n  - Directors welcomed the authorities’ intention to treat remaining access under the FCL as precautionary.\n  - Recommended continued accumulation of reserves over time to preserve reserve coverage.\n- Structural and social policies:\n  - Encouraged continued efforts to promote employment, inclusive growth, and external competitiveness by implementing the National Development Plan and Peace Accords.\n  - Commended efforts to integrate Venezuelan migrants into the economy (including granting Temporary Protective Status) and noted this should raise Colombia’s potential growth in the medium term.\n  - Acknowledged progress on governance and transparency and encouraged sustained efforts to strengthen the anti-corruption and AML/CFT frameworks."
    },
    {
      "heading": "External sector, financing, and vulnerabilities",
      "content": "- Current account deficit projection: projected to widen to 3¾ percent of GDP on account of higher growth and imports picking up.\n- External financing needs: expected to remain elevated.\n- Financing composition: As non-oil FDI recovers and public borrowing needs decline, the share of private capital flows in external financing is expected to increase.\n- External debt and reserves (selected indicators from table):\n  - External debt (percent of GDP and related series shown across years in the source table).\n  - Gross international reserves series show levels and projections in billions of U.S. dollars as provided in the source table.\n  - Share of short-term debt at remaining maturity + CA deficit: series shown in source table (e.g., 113, 103, 100, 116, 124, 132, 111, 108, 104.5)."
    },
    {
      "heading": "Key statistics (selected figures from the report)",
      "content": "- Population (million), 2019: 50.3\n- Unemployment rate, 2019 (percent): 9.7\n- Urban population (percent of total), 2019: 81.1\n- Physicians (per 1,000 people), 2018: 2.2\n- Per capita (US$), GDP, 2020: 5,393\n- In billion of Col$, GDP, 2020: 1,002,587\n- In billion of US$, GDP, 2020: 271\n- Gini coefficient, 2019: 52.6\n- Poverty rate, 2019: 35.7\n- Life expectancy at birth (years), 2018: 77.1\n- Mortality rate (under 5, per 1,000 live births), 2018: 14.2\n\n- Selected macro projections and historical series (percent changes or levels as reported):\n  - Real GDP: 2016: 2.1; 2017: 1.4; 2018: 2.6; 2019: 3.3; 2020: -6.8; 2021: 5.1; 2022: 3.6; 2023: 4.0; 2024: 3.8\n  - Potential GDP: 2016: 3.0; 2017: 2.9; 2018: 3.1; 2019: -2.0; 2020: 2.7; 2021: 2.8; 2022: 3.2\n  - Output Gap series: 2016: 0.6; 2017: -0.8; 2018: -1.2; 2019: -1.0; 2020: -5.9; 2021: -3.7; 2022: -2.9; 2023: -1.9; 2024: -1.1; 2025: -0.4; 2026: 0.0\n  - Consumer prices (average): 2016: 7.5; 2017: 4.3; 2018: 2.5\n  - Consumer prices, end of period (eop): 2016: 5.7; 2017: 4.1; 2018: 1.6\n  - Exports (f.o.b.): series includes 2019: -4.7; 2020: -21.0; 2021: 24.9; 2022: 4.5; 2023: 3.7\n  - Imports (f.o.b.): series includes 2019: -18.5; 2020: 16.4; 2021: 4.2; 2022: 5.4; 2023: 5.0\n  - Broad money: 2019: -3.0; 2020: 11.1; 2021: 9.9\n  - Credit to the private sector: 2016: 7.7; 2017: 12.8; 2018: 6.8; 2019: 11.6; 2020: 9.4; 2021: 10.9; 2022: 11.3; 2023: 11.4\n  - Central government balance (percent of GDP): 2016: -4.0; 2017: -3.6; 2018: -4.8; 2019: -2.5; 2020: -7.7; 2021: -9.5; 2022: -4.4; 2023: -2.4\n  - Central government structural balance: 2016: -3.3; 2017: -2.6; 2018: -2.3; 2019: -2.2; 2020: -6.4; 2021: -8.0; 2022: -2.7\n  - Public sector gross debt (percent of GDP): 2016: 49.8; 2017: 49.4; 2018: 53.6; 2019: 52.3; 2020: 62.8; 2021: 64.2; 2022: 64.3; 2023: 63.5; 2024: 61.4; 2025: 59.3; 2026: 57.2\n  - Gross domestic investment (percent of GDP): 2016: 23.2; 2017: 21.6; 2018: 21.2; 2019: 21.5; 2020: 18.8; 2021: 19.2; 2022: 19.8; 2023: 20.5; 2024: 20.8\n  - Gross national savings (percent of GDP): 2016: 18.6; 2017: 18.2; 2018: 17.1; 2019: 15.5; 2020: 15.4; 2021: 16.0; 2022: 16.6; 2023: 16.9\n  - Current account (deficit - percent of GDP): 2016: -3.4; 2017: -4.1; 2018: -3.8; 2019: -3.9\n  - External debt (percent of GDP and percent of exports series provided in source table)\n  - External debt service (percent of exports of goods and services): series includes values such as 2016: 66.6; 2017: 72.0; 2018: 68.9; 2019: 75.1; 2020: 109.3; 2021: 88.4; 2022: 80.2\n  - Interest payments (percent of exports of goods and services): series includes values such as 2016: 10.7; 2017: 10.5; 2018: 14.9; 2019: 15.3; 2020: 14.8; 2021: 15.0\n  - Selected export figures (in billions of U.S. dollars) series: 2016: 34.1; 2017: 39.8; 2018: 44.4; 2019: 42.4; 2020: 33.5; 2021: 41.8; 2022: 43.7; 2023: 45.3; 2024: 46.9; 2025: 48.8; 2026: 50.8\n  - Of which: Petroleum products (series in billions of U.S. dollars): 2016: 10.8; 2017: 13.3; 2018: 8.8; 2019: 13.4; 2020: 12.9; 2021: 13.0\n  - Gross international reserves (series in billions of U.S. dollars): 2016: 46.2; 2017: 47.1; 2018: 47.9; 2019: 52.7; 2020: 58.5; 2021: 60.7; 2022: 61.6; 2023: 63.3; 2024: 65.5\n\nSource: IMF Executive Board Concluding Statement of the 2021 Article IV Consultation with Colombia (March 23, 2021).\n\n---\n\n\n References\n\n- https://www.imf.org/-/media/images/imf/bios/imfboard.jpg\n- The Executive Board\n- Colombia and the IMF\n- IMF Policy Advice -- A Factsheet\n- Press Releases\n- PRESS CENTER\n- http://www.IMF.org/external/np/sec/misc/qualifiers.htm\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2021/03/23/pr2178-colombia-imf-executive-board-concludes-2021-article-iv-consultation"
    }
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    "Published: March 23, 2021",
    "The Executive Board of the International Monetary Fund concluded the Article IV consultation with Colombia on March 19, 2021.",
    "Colombia experienced a severe social and economic toll from COVID-19, including more than 60,000 deaths and GDP contracting by 6.8 percent in 2020.",
    "The authorities implemented a coordinated policy response using their strong policy framework, including a crisis mitigation fund, emergency measures supporting health care, households and businesses, a flexible exchange rate, monetary policy accommodation and liquidity support, temporary suspension of the fiscal rule, and macroprudential measures.",
    "A national vaccination program covering most of the population started in February.",
    "2020 GDP contraction: -6.8 percent.",
    "Growth outlook: GDP is projected to rebound to around 5 percent in 2021 (staff projection: 5.1 percent).",
    "Timing of return to pre-pandemic levels: not projected until the second half of 2022.",
    "Labor market: Over 5 million jobs were temporarily affected; unemployment peaked and has partly rebounded though local lockdowns have recently dampened employment gains.",
    "Risks: Both external and domestic risks to growth remain tilted to the downside.",
    "Directors recognized Colombia’s very strong policy frameworks and track record that enabled a timely policy response to the pandemic.",
    "Near-term policy stance: Emphasized the need for sustained policy support in the near term while safeguarding financial stability and medium-term fiscal sustainability.",
    "Fiscal policy:",
    "Monetary and financial sector policy:",
    "External financing and reserves:",
    "Structural and social policies:",
    "Current account deficit projection: projected to widen to 3¾ percent of GDP on account of higher growth and imports picking up.",
    "External financing needs: expected to remain elevated.",
    "Financing composition: As non-oil FDI recovers and public borrowing needs decline, the share of private capital flows in external financing is expected to increase.",
    "External debt and reserves (selected indicators from table):",
    "Population (million), 2019: 50.3",
    "Unemployment rate, 2019 (percent): 9.7",
    "Urban population (percent of total), 2019: 81.1",
    "Physicians (per 1,000 people), 2018: 2.2",
    "Per capita (US$), GDP, 2020: 5,393",
    "In billion of Col$, GDP, 2020: 1,002,587",
    "In billion of US$, GDP, 2020: 271",
    "Gini coefficient, 2019: 52.6",
    "Poverty rate, 2019: 35.7",
    "Life expectancy at birth (years), 2018: 77.1",
    "Mortality rate (under 5, per 1,000 live births), 2018: 14.2",
    "Selected macro projections and historical series (percent changes or levels as reported):",
    "[https://www.imf.org/-/media/images/imf/bios/imfboard.jpg](https://www.imf.org/-/media/images/imf/bios/imfboard.jpg)",
    "[The Executive Board](https://www.imf.org/external/np/sec/memdir/eds.aspx)",
    "[Colombia and the IMF](http://www.imf.org/external/country/COL/index.htm)",
    "[IMF Policy Advice -- A Factsheet](https://www.imf.org/en/about/factsheets/imf-surveillance)",
    "[Press Releases](https://www.imf.org/en/news/searchnews)",
    "[PRESS CENTER](http://presscenter.imf.org/)",
    "[http://www.IMF.org/external/np/sec/misc/qualifiers.htm](http://www.imf.org/external/np/sec/misc/qualifiers.htm)",
    "[https://www.imf.org/en/home](https://www.imf.org/en/home)"
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