What are the next steps to maintain economic growth in a recovering international economy? At the AS/COA Latin American Conference in Bogota, speakers answered this question, explainig the context of Colombia’s economic growth in the last year and debating what still needs to be done for the country to reach its potential.
What’s ahead for Colombia’s economy depends on the international economy’s progress, but the country’s monetary policy, investments in infrastructure, and Colombian trade expansion could change this year’s course.
The Bank of the Republic’s Juan Pablo Zárate gave a presentation about Colombia’s monetary policy in the context of today’s world monetary and exchange rate scenario. Over the year, Colombia’s monetary policy favored less exchange-rate appreciation, characterized by interest rates reduction and currency intervention, as the country increased foreign currency purchase, jumping from buying $20 million between June and July of 2012 to $37 million between February and May of this year. Zárate also added that there are positive fiscal incentives on the horizon, as it is expected that local governments in Colombia will spend more this year and that there will be housing market improvements due to government subsidy programs focused on reducing interest rates.
Source: AS/COA Bogotá Blog 2013