Weekly Report - 5 August 2003

It is not every day that governments hold on to the most pessimistic forecast of economic performance, yet that is what the Uribe administration is doing. It insists on predicting that GDP growth this year will be about 2%. Private economists (and some officials speaking off the record) say that it is likely to be at least 2.5%. 

This view is supported by the latest estimate of second-quarter growth by Santiago Montenegro, head of the national planning department, DNP. On 1 August he said, 'It will not be as good [as the 3.8% recorded in the first quarter] but we can say with considerable certainty that it will be 3% or somewhat more.' 

Montenegro pointed to the reduction of the unemployment rate, from 16% to 14.2%, as a clear sign that the economy is recovering and that some sectoral policies are beginning to make an impact on the jobs market. This, he said, is making the government 'optimistic but not triumphalistic.'