The Colombian economy will expand 4.9% in 2021 forecasts the World Bank, and number close to the global average 5%. According to data released in the bank’s biannual report “Back to Growth,” Colombia is modestly rebounding after the country suffered its worst recession in a half-century during the first year of the pandemic.
With the region among the most impacted in the world as coronavirus cases spiraled out of control, the World Bank’s analysis of the current reality is optimistic given that in 2019, the Colombian economy grew 3.3%. Among the setbacks in maintaining growth above 5% is deepening income inequality and vulnerable informal labor market.
The report recognizes that the government of President Iván Duque “responded promptly to the crisis and took decisive actions to protect lives and livelihood, and to support the economy.” In addition to credit lines and loan guarantees given to sectors deeply affected by the crisis, on the monetary front, the Banco de la República (Central Bank) cut its intervention rate 250 base points between March and September and introduced a series of measures to boost liquidity.
Colombia’s forecast is on par with Argentina, yet below Chile’s 5.5%. The Latin American country that will outperform is Peru with 7.6%. The reopening of Peru’s mining sector and rising demand for copper is driving economic recovery, despite the country registering one of the largest coronavirus outbreaks in the initial stages of the pandemic.
The international lender, however, remains cautious with its projections given the slow pace to reach herd immunity in the region. “Renewed outbreaks; difficulties obtaining or distributing vaccines, especially in countries without domestic production capabilities; or challenges surrounding the efficacy of vaccines could force the reintroduction of mitigation measures, with grave economic consequences,” states the report. The World Bank also highlights that economic recovery could be dragged-down by a “resurgence of social unrest, deeper-than-expected economic damage from the pandemic in the medium term, and disruptions related to climate change and natural disasters.”
Colombia has administered 2 million vaccines since the first Pfizer shipment in mid-February. The government plans to increase vaccinations by 600,000 doses per week starting April. The country has registered 2.4 million cases of infection and 63,000 deaths.