Colombia Economic Outlook. First quarter 2021

Summary

The Colombian economy starts its recovery process from the second half of 2020. It will grow 4.8% in 2021 and 3.8% in 2022 boosted by private consumption and investment. Inflation will gradually return to its target in 2021 and the Central Bank will hold rates at low levels during 2021.

Key points

• Key points:
• With the pandemic uncontained at a global level, Colombia faces the second wave of contagions that will slow the recovery.
• The dynamic of private consumption and investment will allow a 4.8% growth for 2021 and 3.8% for 2022.
• Inflation will accelerate in May, reaching an annual variation for the end of 2021 of 2.8%.
• The Central Bank will maintain interest rates low during 2021 and start their normalization cycle in the second quarter of 2022.
• The external balance moderated in 2020, due to an important adjustment made by the private sector. Important challenges will be confronted in the fiscal front in order to achieve fiscal consolidation by 2022.

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