Colombia | Sowing Savings, Reaping Investment

Summary

Savings in Colombia have decreased, affecting investment in key sectors. Increasing disposable income and savings is crucial to fostering economic growth. Policies should focus on promoting savings and productive investment.

Key points

• Key points:
• Gross savings in Colombia fell to 14.5% of GDP in March 2024, compared to 17.3% the previous year and 18% before the pandemic. This raises concerns about the country's capacity to finance investments in infrastructure, education, and technology.
• Disposable income showed nominal growth of 2.6% annually at the national level and 4.8% in households as of March 2024, figures insufficient to offset the 7.4% inflation at that time, resulting in a real decline in purchasing power and limiting households' ability to save.
• Households' savings capacity has decreased from 4.6% of GDP a year ago to 4.2% in March 2024, well below the 6.1% level before the pandemic, indicating the need for policies that promote savings and prevent increased payment capacity from translating into spending.
• Reactivating productive credit is essential to finance business investment and home purchases, key elements for sustainable growth in the Colombian economy.

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