ECLAC reduced Colombia's growth projection for 2015 from 4.3% to 3.6%
- AlexandraRuiz
- Apr 7, 2015
- 3 min read
The agency attached to the United Nations estimated that the growth would be lower than the previous estimate of 2.2% that it forecast in December for Latin America and reduced the forecast for Colombia from 4.3% to 3.6%.
The downward revision of the Gross Domestic Product in Colombia corresponds to "the fall and fatigue of the Colombian economic model," according to Eduardo Sarmiento.
However, the National Government's projections range between 4.2% and 4.5% for this 2015, which is supported by public and private investment and construction. It is also believed that the peace process and the tax reform will contribute to the growth and influence the climate of the markets.
Likewise, one of the factors of the downward revision of the growth projections is that they are made based on the study of imports, exports, and above all, industrial and agricultural production.
According to ECLAC, the growth projections of the economies specialized in the production of primary goods, especially oil and minerals, are those that have experienced the highest losses.
Conversely, the economies that have more significant links with the US economy, and that benefit from the fall in the price of crude oil, register the best projections, as is the case of Central America and the English-speaking Caribbean.
That is why, although regional forecasts are not very optimistic, the countries that will lead the regional expansion during 2015 will be Panama, with a 6% increase in GDP, Antigua and Barbuda (5.4%), and Bolivia, Nicaragua and the Dominican Republic (5%).
This review also reflects a less dynamic global outlook than expected at the end of 2014. According to Sarmiento, this change in global activity is related to the close relationship that exists between the markets of the region. Likewise, the slower growth of the regional economy is compounded by higher international financial volatility of very expansionary monetary policies in Europe and Japan, while anticipating a rise in interest rates in the United States.
On the Brazilian side, the outlook changed. Until a while ago, the executive secretary of Cepal, the Mexican Alicia Bárcena, had argued that Latin America would have economic growth of more than 2.5% in 2015 and that despite the problematic international panorama, Brazil would lead the rise as "the engine of the region." However, the forecast leaves the country of Rio de Janeiro in the tail of regional growth.
IMF forecasts weak growth in the global economy
The drastic fall in oil prices is one of the reasons why the outlook for the economy remains disappointing, according to the "Global Economic Forecasts Report" of the International Monetary Fund.
The document entitled "Where do we go? Perspectives on potential growth," explains that the global growth rate has decreased in recent years, as a result of the aging of the population and lower productivity. For the IMF, much of this economic slowdown will be absorbed by China.
The opinions
Eduardo Sarmiento Palacio
Director of Economic Research Center Colombian School of Engineering
"The growth of Colombia will not be higher than 3%, despite the projections made by the Government. State officials were wrong; the commodity-based model is not sustainable. "
Omar Saúl Duarte
Investment Banking Manager Právne Consulting Group
"Latin America does not have effective policies for a sustainable economy, and the decrease in demand for raw materials by Asian countries further plunges the region into this economic instability that reflects GDP."
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