Colombia Economic Outlook. Third quarter 2021

In 2021 and 2022, economic growth will be driven by the strong dynamism of internal demand and the global economy. Transitory factors will put pressure on inflation and the risk that it will take time to return, with higher activity, will lead the Central Bank to begin a tightening cycle of rates in late 2021.

Key points

• Key points:
• The global economy will continue to recover driven by faster vaccination, economic reopening and significant stimulus, mainly in developed countries.
• The Colombian economy has shown greater operational capacity in the midst of a strong wave of contagions and localized lockdowns, maintaining its resilience despite the logistical problems caused by the strikes.
• Transitory factors caused by the protests and the rise in commodity prices will push inflation up in 2021. In 2022, inflation will begin a downward cycle.
• The government will move slowly on a path of adjustment of public finances, with very gradual reductions in the fiscal deficit and, above all, in public debt. The current account deficit will remain above 4% of GDP in 2021 and 2022.
• Higher international interest rates and external financing requirements will keep the exchange rate elevated in 2021 and 2022.

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