IMF Staff Country Reports

This 2023 Article IV Consultation highlights that the Colombian economy is now undergoing a necessary transition toward a more sustainable growth path. Macroeconomic policies that had been tightened last year and are expected to carry on this year are facilitating this transition, along with a slowing global growth and higher global borrowing costs. While downside risks persist and remain elevated, Colombia’s very strong economic fundamentals, policies, and policy frameworks support its resilience. On the external front, global financial conditions could tighten more sharply than anticipated with negative knock-on effects on commodity prices, capital outflows and domestic demand. Policy implementation remains very strong, geared toward correcting macroeconomic imbalances that built up during the pandemic while protecting the most vulnerable and advancing structural reforms, consistent with past IMF Advice. The administration’s equity agenda envisages improving the coverage and progressivity of the healthcare and pension systems as well as improving worker rights such as overtime pay. Implementing the reform agenda carefully and prudently, in close consultation with relevant stakeholders, will be essential to preserve fiscal and financial stability, and ensure that economic incentives are well aligned.