IMF Sees Colombia Recovery

The IMF expects a recovery for the Colombian economy thanks following a recession-related dip, thanks to economic policies implemented before and during the global financial crisis. The multilateral says GDP growth is expected to pick up to about 2.0%-2.5% in 2010 compared to a contraction of 0.2% in 2009 as monetary and fiscal policy continue supporting domestic demand. The country’s financial system will also provide a strong basis for a resumption of credit, predicts the IMF. Inflation will expected to rise due to temporary increases in food prices related to El Nino, but nonetheless remain within the 2.0%-4.0% target range during the year, notes the agency. The balance of payments position is expected to improve, with strong capital flows expected to more than cover the increase in the external current account deficit. The global lender also highlights that public debt remains moderate and should decline over the medium term as growth resumes.