Itaú BBA - Macro Scenario - Colombia: Hard hit

Macro Latam

< Voltar

Macro Scenario - Colombia: Hard hit

Maio 11, 2020

The economy is on the receiving end of two shocks, one from the coronavirus and the other from oil market developments.


For the full version with all charts and tables, please open the attached pdf file

 

 The Colombian economy is on the receiving end of two shocks, one from the effects of the coronavirus and the other from developments in the oil market. With the government imposing a countrywide lockdown for nearly two months, the impact on domestic demand will be significant. We see activity shrinking 4.7% this year (+3.3% last year). 

 Low growth and oil prices will bring the fiscal deficit to above 6% (2.5% last year). The rapid worsening of fiscal metrics increases the risk of Colombia losing investment grade status, also considering only a slight correction to the current account deficit. 

 Despite worsening fundamentals, inflation is set to end this year below the 3% target. We now see rates reaching 2.0% before the end of this year (currently 3.25% and 2.75% in our previous scenario).

 

João Pedro Bumachar
Vittorio Peretti
Miguel Ricaurte


 

For the full version with all charts and tables, please open the attached pdf file



< Voltar