IMF says Colom­bia has a strong pol­icy frame­work

The Pak Banker - - Front Page -

WASHINGTON

An In­ter­na­tional Mon­e­tary Fund (IMF) mis­sion, led by Ms. Va­lerie Cerra, vis­ited Bo­gotá from Novem­ber 6-16, 2012 to hold the an­nual Ar­ti­cle IV con­sul­ta­tion.i The team held dis­cus­sions with the au­thor­i­ties and the pri­vate sec­tor about re­cent eco­nomic and fi­nan­cial de­vel­op­ments, and the nearand medium-term out­look. At the end of the mis­sion, Ms. Cerra is­sued the fol­low­ing state­ment in Bo­gotá on Novem­ber 16:

“Colom­bia has a strong pol­icy frame­work, which has un­der­pinned its re­silience to the global tur­bu­lence of re­cent years. Pru­dent mon­e­tary and fis­cal man­age­ment, a flex­i­ble ex­change rate, and a sound fi­nan­cial sys­tem helped mit­i­gate the im­pact of those ex­ter­nal shocks and sta­bi­lize growth rel­a­tive to peer coun­tries, as il­lus­trated by the par­tic­u­larly buoy­ant econ­omy ac­tiv­ity in 2011. “The mod­er­a­tion of growth ob­served in 2012 is largely the con­se­quence of the de­mand man­age­ment poli­cies adopted last year to con­tain risks. The mon­e­tary tight­en­ing and macro-pru­den­tial mea­sures to stem high credit growth and the mea­sures to re­duce the fis­cal deficit and pub­lic debt have brought about a wel­come mod­er­a­tion in ag­gre­gate de­mand. Rip­ple ef­fects from the weak ex­ter­nal en­vi­ron­ment and un­ex­pected sup­ply shocks also have contributed to dampen eco­nomic ac­tiv­ity. Re­flect­ing all th­ese fac­tors, real GDP in 2012 is pro­jected to be slightly lower than 4½ per­cent.

“In 2013 and be­yond, we ex­pect growth to hover around 4½ per­cent (which we re­gard as Colom­bia’s sus­tain­able growth rate) and in­fla­tion to re­main within the 2-4 per­cent tar­get range. The stance of mon­e­tary and fis­cal pol­icy planned for 2013 seems con­sis­tent with the ex­pected pickup in eco­nomic ac­tiv­ity.

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