Statement by IMF First Deputy Managing Director John Lipsky on ColombiaPress Release No. 10/149
April 14, 2010
Mr. John Lipsky, First Deputy Managing Director of the International Monetary Fund (IMF), made the following statement today in Washington:
“I welcome the authorities’ indication that Colombia is interested in a new one-year precautionary arrangement under the IMF’s Flexible Credit Line (FCL) for an amount of SDR 2.3 billion (approximately US$ 3.5 billion, or 300 percent of quota).
“Colombia was not severely affected by the global crisis, and the impact was cushioned by timely countercyclical measures. Overall, in the last five years, Colombia’s sound policies underpinned a strong macroeconomic performance and resulted in an average economic growth of 4.6 percent, above the rest of the Latin America region.
“The outlook for 2010 is generally positive, with growth expected to be above 2 percent. While global conditions have vastly improved since early 2009, downside risks remain. The strength of the global recovery remains uncertain and the stimulus measures in advanced economics have not yet produced strong private sector demand growth. Therefore, I share the authorities’ view that a successor FCL arrangement, in the proposed amount, would provide a useful insurance against external risks that are somewhat lower than a year ago. The first FCL (900 percent of quota, or about US$ 10.4 billion) provided room for countercyclical policies and strengthened investor confidence, helping the country to maintain continuous access to capital markets at favorable terms. The IMF’s Management intends to seek approval by the Fund's Executive Board of Colombia’s request for an FCL arrangement in early May.”
Colombia’s FCL was approved in May 11, 2009 (See Press Release No. 09/161). The FCL is an instrument established on March 24, 2009 that is available to Fund member countries deemed to possess very strong fundamentals, policies, and track records of policy implementation. Access to FCL resources is based on the requesting country having met these criteria, rather than on fulfilling ex-post performance criteria (see Press Release No. 09/85 and Public Information Notice No. 09/40 for more information on the FCL and the qualifying criteria).