Colombia Cuts GDP Forecast

Colombia may have reduced its GDP growth expectations for 2009 to 3.0% from 3.5%, but Credit Suisse and JPMorgan believe the forecast to be too optimistic. Credit Suisse has chopped its 2009 real GDP growth forecast for Colombia to 2.0% from 2.6%, citing the “dismal” performance of industrial production in the fourth quarter. JPMorgan, meanwhile, forecasts GDP growth of 2.5%. Credit Suisse also says the central government’s prediction of an overall deficit of COP16.3bn or 3.2% of GDP is “overly optimistic” and predicts, on a preliminary basis, that it will be slightly above 4.0% of GDP. However, the shop expects the government to be able to fund its borrowing needs.