(Reuters) - Economic growth in Colombia will probably slow to around 4.3 percent in 2015 from 5 percent this year, hurt by lower oil prices and a drop in exports due to a sluggish global economy, central bank chief Jose Dario Uribe said on Friday.
The forecast would put growth below potential, which is estimated at about 4.8 percent annually. The bank sees expansion in the second half of this year of about 4.6 percent, Uribe said in his quarterly presentation on the economy.
"It's a slowdown, but remains important growth. Indeed 4.6 percent is the fastest growth among bigger economies in the region and a great majority of countries worldwide," Uribe said.
A strengthening of the economy of the United States, Colombia's biggest trade partner, will be positive for the Andean nation in the coming quarters and help maintain stable growth, said Uribe, one of seven board members who decide on monetary policy.
The central bank maintained its growth forecast of 5 percent for this year, though it said it could come in slightly below that.
Central bank board member Ana Fernanda Maiguashca told Reuters in an interview this week that a slowdown in 2015 to growth of between 4.3 and 4.5 percent would be healthy, bringing expansion back below the economy's potential.
The bank expects inflation this year and next to be about 3 percent, the midpoint of its 2 percent to 4 percent target range.
Policymakers raised the overnight lending rate by 125 basis points between April and August to trim surprisingly fast 6.5 percent economic expansion in the first quarter and to head off any inflationary pressure.
Last week the board voted to hold the rate at 4.5 percent for a second straight month. Declining oil prices affect the government's revenue stream, and so spending and the overall economy, Uribe said.
"There is some uncertainty about future behavior of oil prices," he said. "That's important for Colombia since close to half of total exports come from oil sales and crude is an important source of income for the public sector."
reuters.com
The forecast would put growth below potential, which is estimated at about 4.8 percent annually. The bank sees expansion in the second half of this year of about 4.6 percent, Uribe said in his quarterly presentation on the economy.
"It's a slowdown, but remains important growth. Indeed 4.6 percent is the fastest growth among bigger economies in the region and a great majority of countries worldwide," Uribe said.
A strengthening of the economy of the United States, Colombia's biggest trade partner, will be positive for the Andean nation in the coming quarters and help maintain stable growth, said Uribe, one of seven board members who decide on monetary policy.
The central bank maintained its growth forecast of 5 percent for this year, though it said it could come in slightly below that.
Central bank board member Ana Fernanda Maiguashca told Reuters in an interview this week that a slowdown in 2015 to growth of between 4.3 and 4.5 percent would be healthy, bringing expansion back below the economy's potential.
The bank expects inflation this year and next to be about 3 percent, the midpoint of its 2 percent to 4 percent target range.
Policymakers raised the overnight lending rate by 125 basis points between April and August to trim surprisingly fast 6.5 percent economic expansion in the first quarter and to head off any inflationary pressure.
Last week the board voted to hold the rate at 4.5 percent for a second straight month. Declining oil prices affect the government's revenue stream, and so spending and the overall economy, Uribe said.
"There is some uncertainty about future behavior of oil prices," he said. "That's important for Colombia since close to half of total exports come from oil sales and crude is an important source of income for the public sector."
reuters.com
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