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LatinNews Daily - 02 August 2021

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In brief: Colombia’s central bank raises growth projection

* Colombia’s central bank (Banrep) has announced an increase in its economic growth projection for the country in 2021 from 6.5% to 7.5%. The decision is due to increased stability after the widespread barricading of key transit routes during anti-government protests in May and June caused economic setbacks – notably an increase in annual inflation, which reached 3.63% in June compared with below 2% in the first quarter of the year. A Banrep statement explained that although the outlook has now improved, “the output gap remains in negative territory and excessive productive capacity persists, as reflected in recent labour market figures, in the context of continued high levels of uncertainty.” The bank also announced that it would maintain the benchmark interest rate at 1.75%, but warned that “the space available to maintain current levels of monetary stimulus is closing, given recent inflation behaviour and its possible persistence, as well as the upward revision to the growth forecast”.