Colombia’s economy will grow at least 5% in 2021, Finance Minister Alberto Carrasquilla said on Monday, predicting a sharp turnaround from this year’s estimated contraction.
The government has predicted gross domestic product will shrink 5.5% this year, as a coronavirus lockdown and low oil prices batter the Andean country’s economy.
The government has also predicted a more than $6 billion decrease in national income. It will seek funding via international and local bonds or use an available line of credit with the International Monetary Fund.
“We think that in 2021 this economy will grow at least 5%,” Carrasquilla told lawmakers in a virtual hearing. “Growing at 6% like we had thought would happen, we won’t be able to recover from the hit of 2020 and be on the favorable trajectory the country had.”
“I do think we will have a quick recovery. We have businesses in Colombia that are ready to act,” Carrasquilla added.
Although reduced tax collection in 2020 will affect the government’s room to maneuver next year, Carrasquilla urged lawmakers to focus on economic recovery.
“This is not the time to get frightened by debt. It is not the time to get frightened because the fiscal deficit is growing. It is the time to resolve this crisis, to use the resources that are necessary and to think of recovery.”
A months-long coronavirus quarantine – begun in late March and set to last until July 1 – halted much of the economy. Many sectors are gradually reopening, but business owners have complained of a slow government permitting process.
Urban unemployment spiked in April to 23.5%, more than double the rate the same month a year earlier.