{
  "title": "IMF Executive Board Concludes 2023 Article IV Consultation with Colombia",
  "publication": "IMF News, March 23, 2023",
  "sourceUrl": "https://www.imf.org/en/news/articles/2023/03/23/pr2390-imf-concludes-2023-article-iv-consultation-with-colombia",
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  "summary": "Benefiting from an effective policy response to the pandemic and highly favorable terms of trade, Colombia’s economy grew at 7.5 percent year-on-year in 2022; one of the fastest rates among emerging economies.",
  "publishDate": "2023-03-23",
  "sections": [
    {
      "heading": "Growth, inflation, and external balance",
      "content": "- Colombia’s economy grew at 7.5 percent year-on-year in 2022.\n- Headline inflation reached 13.3 percent year-on-year in February 2023.\n- The current account deficit widened from 5.6 percent of GDP in 2021 to 6.2 percent of GDP in 2022.\n- The economy is transitioning toward a more sustainable growth path supported by tightened macroeconomic policies.\n- The cooling of the economy is expected to:\n  - Bring inflation towards the central bank’s target by end-2024.\n  - Narrow the current account deficit gradually to its historical average (about 4 percent of GDP), with the bulk financed through foreign direct investment."
    },
    {
      "heading": "Risks and external buffers",
      "content": "- Downside risks are elevated, notably:\n  - Sharper-than-anticipated tightening of global financial conditions with negative effects on commodity prices, capital flows, and domestic demand.\n  - Domestic risks related to sequencing and communication of reforms and the need to keep macro policies sufficiently tight to reduce internal and external imbalances.\n- The two-year Flexible Credit Line (FCL) arrangement approved in April 2022 provides access amount equivalent to SDR7.1557 billion (about US$9.8 billion) on a precautionary basis, enhancing external buffers and resilience."
    },
    {
      "heading": "Executive Board assessment and policy messages",
      "content": "- Directors agreed with the thrust of the staff appraisal: the economy is moving from a robust recovery to sustainable growth, but downside risks remain elevated.\n- Fiscal policy:\n  - Directors welcomed the strong fiscal adjustment in 2022 and the planned adjustment in 2023, noting these go beyond the consolidation required by the fiscal rule.\n  - The planned adjustment was seen as balancing deficit reduction while using progressive tax reform to increase social spending.\n  - Authorities’ commitment to implement fiscal rules was welcomed.\n  - Many Directors recommended improving fiscal balances slightly beyond the fiscal rule path in the coming years to reduce financing needs, strengthen convergence of public debt to its medium-term anchor, build buffers, and durably reduce external imbalances. A few Directors did not see a need for tightening beyond the fiscal rule in the medium term.\n  - Continued efforts to gradually remove distortive fuel subsidies remain important.\n- Monetary policy:\n  - Directors commended the central bank’s decisive monetary policy tightening consistent with its inflation-targeting framework.\n  - They welcomed the commitment to maintain a tight monetary stance until price pressures and inflation expectations are on a firm downward trend, and emphasized the importance of effective central bank communication.\n- External sector and exchange rate:\n  - Directors noted the external position is sustainable and that the flexible exchange rate should continue to facilitate external adjustment, provided financial stability is not compromised.\n  - The FCL was noted as continuing to provide additional external buffers against tail-risks and enhancing market confidence.\n- Financial sector and structural reforms:\n  - While the financial sector remains resilient, Directors emphasized close monitoring of risks and emerging vulnerabilities and encouraged continued progress on the 2022 FSAP recommendations supported by Fund technical assistance.\n  - Directors were encouraged by the objectives of healthcare, pensions, and labor market reforms, urging prudent implementation to preserve fiscal and financial stability.\n  - They commended the authorities’ objective of reducing reliance on oil and coal and noted that a successful transition requires a well-communicated and gradual plan balancing domestic energy needs, foreign exchange generation capacity, and the global transition to a low-carbon economy.\n  - Continued advancement on governance and anti-corruption was encouraged."
    },
    {
      "heading": "Key social, demographic, and selected economic indicators (as reported)",
      "content": "- Population (million), 2022. Projection: 51.6\n- Unemployment rate, 2022 (SA, percent): 11.3\n- Urban population (percent of total), 2020: 81.4\n- Physicians (per 1,000 people), 2018: 3.8\n- Adult illiteracy rate (ages 15 and older), 2020: 4.4\n- Per capita (US$): 6,665\n- Net secondary school enrollment rate, 2018: 77.5\n- In billion of Col$: 1,463,873\n- Gini coefficient, 2021: 52.3\n- In billion of US$: 344\n- Poverty rate, 2021: 39.3\n- Life expectancy at birth (years), 2019: 76.8\n- Mortality rate, (under 5, per 1,000 live births), 2020: 13.2"
    },
    {
      "heading": "Selected macroeconomic projections and indicators (annual percent changes or levels as labeled)",
      "content": "- Real GDP: 2019: 3.2; 2020: -7.3; 2021: 11.0; 2022: 7.5; 2023: 1.0; 2024: 1.9; 2025: 2.9; 2026: 3.3\n- Potential GDP: 2019: 2.1; 2020: -1.2; 2021: 5.0; 2022: 4.8; 2023: 2.7; 2024: 2.5; 2025: 2.4; 2026: 3.1\n- Output Gap: 2019: -0.2; 2020: -6.4; 2021: -1.0; 2022: 1.6; 2023: -0.8; 2024: 0.0\n- GDP deflator: 2019: 4.0; 2020: 1.5; 2021: 7.7; 2022: 14.2; 2023: 8.0; 2024: 3.9; 2025: 3.0\n- Consumer prices (average): 2019: 3.5; 2020: 10.2; 2021: 10.9; 2022: 5.4\n- Consumer prices, end of period (eop): 2019: 5.6; 2020: 13.1; 2021: 8.4\n- Nominal GDP (In Col$ trillion): 2019: 1,060; 2020: 998; 2021: 1,193; 2022: 1,464; 2023: 1,595; 2024: 1,690; 2025: 1,791; 2026: 1,907; 2027: 2,029; 2028: 2,160\n- Exports (f.o.b.): 2019: -5.4; 2020: -20.5; 2021: 32.3; 2022: 39.8; 2023: -9.5; 2024: 0.4; 2025: 1.7\n- Imports (f.o.b.): 2019: 2.3; 2020: -18.5; 2021: 37.7; 2022: 26.2; 2023: -8.1; 2024: -0.4; 2025: 1.1; 2026: 2.8\n- Terms of trade (deterioration -): 2019: -2.3; 2020: -1.6; 2021: 5.3; 2022: 19.7; 2023: -10.7; 2024: -4.5; 2025: -2.5; 2026: -2.0; 2027: -1.4; 2028: -1.5\n- Real exchange rate (depreciation -) 2/: 2019: -5.9; 2020: -7.7; 2021: -3.2; 2022: -4.8\n- Broad money: 2019: 10.0; 2020: 10.3; 2021: 13.6; 2022: 11.2; 2023: 6.4; 2024: 6.9; 2025: 7.0\n- Credit to the private sector: 2019: 11.6; 2020: 12.5; 2021: 16.8; 2022: 7.1; 2023: 7.4\n- Policy rate, eop: 2019: 4.3; 2020: 1.8; 2021: 12.0\n- Central government balance 3/ (In percent of GDP): 2019: -7.8; 2020: -5.5; 2021: -3.8; 2022: -3.6; 2023: -3.4; 2024: -3.0; 2025: -2.9; 2026: -2.8\n- Central government structural balance 4/: 2019: -6.1; 2020: -4.6; 2021: -3.7; 2022: -2.2\n- Consolidated public sector (CPS) balance 5/: 2019: -6.9; 2020: -7.1; 2021: -6.6; 2022: -1.8; 2023: -1.9\n- CPS non-oil structural primary balance: 2019: -4.3; 2020: -4.9; 2021: -2.1; 2022: -0.5\n- CPS fiscal impulse: 2019: 0.8; 2020: 0.6; 2021: -0.3; 2022: 0.7; 2023: -0.1\n- Public sector gross debt 6/: 2019: 52.4; 2020: 65.7; 2021: 64.0; 2022: 63.6; 2023: 62.0; 2024: 61.1; 2025: 60.9; 2026: 60.1; 2027: 59.2; 2028: 58.3\n- Gross domestic investment: 2019: 21.4; 2020: 19.1; 2021: 19.0; 2022: 21.8; 2023: 20.8; 2024: 21.0; 2025: 22.0; 2026: 22.3; 2027: 22.4\n- Gross national savings: 2019: 15.6; 2020: 13.3; 2021: 16.4; 2022: 17.1; 2023: 17.9; 2024: 18.2; 2025: 18.4\n- Current account (deficit -): 2019: -3.5; 2020: -5.6; 2021: -6.2; 2022: -5.1; 2023: -4.1; 2024: -4.0\n- External Financing Needs 7/: 2019: 15.3; 2020: 18.1; 2021: 17.6; 2022: 18.3; 2023: 18.7; 2024: 17.8; 2025: 17.7\n- External debt: 2019: 50.1; 2020: 66.6; 2021: 62.2; 2022: 63.0; 2023: 68.1; 2024: 68.3; 2025: 67.9; 2026: 66.8; 2027: 65.9; 2028: 65.4\n- External debt service (In percent of exports of goods and services): 2019: 77.8; 2020: 113.0; 2021: 84.9; 2022: 63.8; 2023: 77.7; 2024: 86.6; 2025: 85.4; 2026: 90.0; 2027: 91.9; 2028: 90.1\n- Interest payments (In percent of exports of goods and services): 2019: 14.7; 2020: 17.0; 2021: 13.5; 2022: 14.3; 2023: 15.5; 2024: 15.2\n- Gross international reserves (In billion of U.S. dollars; unless otherwise indicated): 2019: 40.7; 2020: 42.7; 2021: 59.8; 2022: 54.1; 2023: 53.5; 2024: 53.7; 2025: 54.6; 2026: 55.5; 2027: 57.2\n- Of which: Petroleum products: 2019: 16.0; 2020: 8.8; 2021: 18.9; 2022: 16.3; 2023: 15.4; 2024: 14.5; 2025: 14.1\n- Gross international reserves 8/: 2019: 52.7; 2020: 58.5; 2021: 58.0; 2022: 56.7; 2023: 57.8; 2024: 59.1; 2025: 60.4; 2026: 61.8\n\nSources: Colombian authorities; UNDP Human Development Report; World Development Indicators; and IMF staff estimates.\n\n---\n\n\n References\n\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/2023/03/23/pr2390-imf-concludes-2023-article-iv-consultation-with-colombia"
    }
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    "Published: March 23, 2023",
    "Colombia’s economy grew at 7.5 percent year-on-year in 2022.",
    "Headline inflation reached 13.3 percent year-on-year in February 2023.",
    "The current account deficit widened from 5.6 percent of GDP in 2021 to 6.2 percent of GDP in 2022.",
    "The economy is transitioning toward a more sustainable growth path supported by tightened macroeconomic policies.",
    "The cooling of the economy is expected to:",
    "Downside risks are elevated, notably:",
    "The two-year Flexible Credit Line (FCL) arrangement approved in April 2022 provides access amount equivalent to SDR7.1557 billion (about US$9.8 billion) on a precautionary basis, enhancing external buffers and resilience.",
    "Directors agreed with the thrust of the staff appraisal: the economy is moving from a robust recovery to sustainable growth, but downside risks remain elevated.",
    "Fiscal policy:",
    "Monetary policy:",
    "External sector and exchange rate:",
    "Financial sector and structural reforms:",
    "Population (million), 2022. Projection: 51.6",
    "Unemployment rate, 2022 (SA, percent): 11.3",
    "Urban population (percent of total), 2020: 81.4",
    "Physicians (per 1,000 people), 2018: 3.8",
    "Adult illiteracy rate (ages 15 and older), 2020: 4.4",
    "Per capita (US$): 6,665",
    "Net secondary school enrollment rate, 2018: 77.5",
    "In billion of Col$: 1,463,873",
    "Gini coefficient, 2021: 52.3",
    "In billion of US$: 344",
    "Poverty rate, 2021: 39.3",
    "Life expectancy at birth (years), 2019: 76.8",
    "Mortality rate, (under 5, per 1,000 live births), 2020: 13.2",
    "Real GDP: 2019: 3.2; 2020: -7.3; 2021: 11.0; 2022: 7.5; 2023: 1.0; 2024: 1.9; 2025: 2.9; 2026: 3.3",
    "Potential GDP: 2019: 2.1; 2020: -1.2; 2021: 5.0; 2022: 4.8; 2023: 2.7; 2024: 2.5; 2025: 2.4; 2026: 3.1",
    "Output Gap: 2019: -0.2; 2020: -6.4; 2021: -1.0; 2022: 1.6; 2023: -0.8; 2024: 0.0",
    "GDP deflator: 2019: 4.0; 2020: 1.5; 2021: 7.7; 2022: 14.2; 2023: 8.0; 2024: 3.9; 2025: 3.0",
    "Consumer prices (average): 2019: 3.5; 2020: 10.2; 2021: 10.9; 2022: 5.4",
    "Consumer prices, end of period (eop): 2019: 5.6; 2020: 13.1; 2021: 8.4",
    "Nominal GDP (In Col$ trillion): 2019: 1,060; 2020: 998; 2021: 1,193; 2022: 1,464; 2023: 1,595; 2024: 1,690; 2025: 1,791; 2026: 1,907; 2027: 2,029; 2028: 2,160",
    "Exports (f.o.b.): 2019: -5.4; 2020: -20.5; 2021: 32.3; 2022: 39.8; 2023: -9.5; 2024: 0.4; 2025: 1.7",
    "Imports (f.o.b.): 2019: 2.3; 2020: -18.5; 2021: 37.7; 2022: 26.2; 2023: -8.1; 2024: -0.4; 2025: 1.1; 2026: 2.8",
    "Terms of trade (deterioration -): 2019: -2.3; 2020: -1.6; 2021: 5.3; 2022: 19.7; 2023: -10.7; 2024: -4.5; 2025: -2.5; 2026: -2.0; 2027: -1.4; 2028: -1.5",
    "Real exchange rate (depreciation -) 2/: 2019: -5.9; 2020: -7.7; 2021: -3.2; 2022: -4.8",
    "Broad money: 2019: 10.0; 2020: 10.3; 2021: 13.6; 2022: 11.2; 2023: 6.4; 2024: 6.9; 2025: 7.0",
    "Credit to the private sector: 2019: 11.6; 2020: 12.5; 2021: 16.8; 2022: 7.1; 2023: 7.4",
    "Policy rate, eop: 2019: 4.3; 2020: 1.8; 2021: 12.0",
    "Central government balance 3/ (In percent of GDP): 2019: -7.8; 2020: -5.5; 2021: -3.8; 2022: -3.6; 2023: -3.4; 2024: -3.0; 2025: -2.9; 2026: -2.8",
    "Central government structural balance 4/: 2019: -6.1; 2020: -4.6; 2021: -3.7; 2022: -2.2",
    "Consolidated public sector (CPS) balance 5/: 2019: -6.9; 2020: -7.1; 2021: -6.6; 2022: -1.8; 2023: -1.9",
    "CPS non-oil structural primary balance: 2019: -4.3; 2020: -4.9; 2021: -2.1; 2022: -0.5",
    "CPS fiscal impulse: 2019: 0.8; 2020: 0.6; 2021: -0.3; 2022: 0.7; 2023: -0.1",
    "Public sector gross debt 6/: 2019: 52.4; 2020: 65.7; 2021: 64.0; 2022: 63.6; 2023: 62.0; 2024: 61.1; 2025: 60.9; 2026: 60.1; 2027: 59.2; 2028: 58.3",
    "Gross domestic investment: 2019: 21.4; 2020: 19.1; 2021: 19.0; 2022: 21.8; 2023: 20.8; 2024: 21.0; 2025: 22.0; 2026: 22.3; 2027: 22.4",
    "Gross national savings: 2019: 15.6; 2020: 13.3; 2021: 16.4; 2022: 17.1; 2023: 17.9; 2024: 18.2; 2025: 18.4",
    "Current account (deficit -): 2019: -3.5; 2020: -5.6; 2021: -6.2; 2022: -5.1; 2023: -4.1; 2024: -4.0",
    "External Financing Needs 7/: 2019: 15.3; 2020: 18.1; 2021: 17.6; 2022: 18.3; 2023: 18.7; 2024: 17.8; 2025: 17.7",
    "External debt: 2019: 50.1; 2020: 66.6; 2021: 62.2; 2022: 63.0; 2023: 68.1; 2024: 68.3; 2025: 67.9; 2026: 66.8; 2027: 65.9; 2028: 65.4",
    "External debt service (In percent of exports of goods and services): 2019: 77.8; 2020: 113.0; 2021: 84.9; 2022: 63.8; 2023: 77.7; 2024: 86.6; 2025: 85.4; 2026: 90.0; 2027: 91.9; 2028: 90.1",
    "Interest payments (In percent of exports of goods and services): 2019: 14.7; 2020: 17.0; 2021: 13.5; 2022: 14.3; 2023: 15.5; 2024: 15.2",
    "Gross international reserves (In billion of U.S. dollars; unless otherwise indicated): 2019: 40.7; 2020: 42.7; 2021: 59.8; 2022: 54.1; 2023: 53.5; 2024: 53.7; 2025: 54.6; 2026: 55.5; 2027: 57.2",
    "Of which: Petroleum products: 2019: 16.0; 2020: 8.8; 2021: 18.9; 2022: 16.3; 2023: 15.4; 2024: 14.5; 2025: 14.1",
    "Gross international reserves 8/: 2019: 52.7; 2020: 58.5; 2021: 58.0; 2022: 56.7; 2023: 57.8; 2024: 59.1; 2025: 60.4; 2026: 61.8",
    "[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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