BTG Boxual Economic Forecasts for 2024

With the still-unknown final balances of 2023 and the focus amid projections and plans for 2024, the economic world is gearing up for a new round in which stopping the recession and building a solid recovery process will be a priority.

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Portafolio interviewed BTG Pactual's chief economist for the Andean region, Munir Jalil, who warns that even though the country is in its darkest hour, it is close to turning around and starting to grow. Try to make the right decisions.

How will the country start this 2024?

In 2024, first, we're going to start to consolidate this convergence of inflation, and second, central banks, including those in developed countries, are going to start lowering their interest rates. However, suddenly, the market is not necessarily as busy as it would like.

Where is Colombia?

I think we are in a situation where inflation will fall, but still remain high, and we believe this downward trend will continue, which will allow the RBI to accelerate its rate of interest rate cuts. It started with cuts in December.

(Read: Five tasks to revive the Colombian economy, according to Amsam).

Can we think about a lower fee for a year?

We believe they will be very close to 25 basis points in these first months of 2024, to accelerate that pace as inflation allows and a more favorable external environment allows. And so the rates outside really start to fall, and then we have the challenge of restoring economic growth.

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Munir Jalil

Juan Felipe Rubio

Will low growth continue?

First of all, the growth of the Colombian economy in 2023 will be very poor. We, specifically, expect 0.7%, but it could be 0.7% to 1%. In other words, it is a very weak development.

(See: Petro Recommends Traders Bring Machinery to Boost Production in Country).

A lot of people are talking about growth being more stable in 2024 and basically staying on the same pages, but we're a little more optimistic. We believe that we can see an acceleration in economic growth in the second half of the year, which means that the economy will grow by 1.7% in 2024, which is not good, but it is definitely better.

Has the bad streak left the good?

One of the positive things about seeing such a strong recession in the Colombian economy is that our current account deficit, our external account deficit, the balance between dollars entering and dollars leaving the Colombian economy has been corrected. In scarcity, we are always in debt.

(Also: Colombia, wary of recession? Statistics to understand the economic outlook).

This year we must consolidate a very strong and very good correction of the current account deficit, so we must maintain a stable current account deficit, which is good, it is positive for the Colombian economy, and in general the other big challenge will be funding, because the government will undoubtedly, to adjust the falling tax revenues. want

At what stage of the storm is the country?

We are still missing. For morning to come, we must pass through the darkest part of the night, and we are precisely at that time. So we have to be a little patient and above all we have to be very aware that good decisions are being taken by the government regarding expenditure.

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How to stop recession?

For this, it will be essential that the government's spending plans, investment plans are implemented and the economy resumes its better momentum especially in the second half of the year. It is important to use these moments to plan well what the government's spending is and to use these first months to focus on where it wants to prioritize and where it wants to pay those costs.

Do you want to start fresh?

No. There are things that already exist, and you don't have to invent anything, and sometimes you don't even have to invent warm water. There are some sectors like construction, not just housing but also infrastructure.

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We know that this is a vital sector that will not recover overnight, but it will be decisive in reactivating the economy. It would be great if these resources were more focused on this and targeted at specific projects.

A panorama calling for signs of calm in the markets

This analyst believes that the second half of 2024 will be much better than experts expected and the country will experience a stronger than expected recovery. However, he cautions that it is necessary to contain uncertainty and provide calm signals to the markets to encourage recovery and attract new capital in the short and medium term, mainly from abroad.

“The government has been saying for some time that there are a number of major infrastructure projects that are going to put infrastructure money into tertiary roads, secondary roads and give that industry a bit more leverage.”said Munir Jalil of BTG Pactual.

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To achieve this, he said, we must work hand in hand with the private sector to prevent a slowdown in the economy in the coming months, implement programs that will secure formal employment and become the axis of growth.

Daniel Hernandez Naranjo

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