Andean Group - December 2008 (ISSN 1741-4466)

The economic outlook for 2009 is none too encouraging. Both of Colombia's main export markets, the US and Venezuela, are likely to have a difficult year. The central bank's high interest rate policy, designed to snuff out inflation, is finally doing that but at a considerable cost to the real economy. Although few believe that the economy will slide into recession, the pace of growth will be considerably slower than in recent years. The range of annual growth forecasts starts at 2% and even the optimists only expect 4% growth. In 2008 the government expected growth of 3% (after forecasting 7% at the beginning of the year), though it may end up being disappointed. In 2007 GDP growth was 7.5%.

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