Credicorp Capital’s projections point to the economy growing 6.5% this year.
The firm Credicorp Capital adjusted its growth forecast for the Colombian economy from 4.8% to 6.5% for this year due to the rise in GDP in the first quarter.
“In fact, our models and the momentum observed in the fourth quarter of 2020 and the first quarter of 2021 suggest the possibility of even greater growth this year, but we prefer to be conservative in the face of the current high uncertainty (we consider a significant slowdown in activity in the months of April and May) “, said the firm. Between January and March 2021 the economy grew 1.1%, a figure much higher than that estimated by analysts and even by the Government and the Banco de la República, they anticipated a negative result.
“Although downward pressures will be observed in the second quarter as a result of the third wave of COVID-19 and the national strike, we believe that the resistance shown so far and the upward factors that will be evident in the future (greater progress in the program vaccination rates and higher oil prices) will more than offset those risks, ”the firm said.
He also highlighted that some cities such as Bogotá have decided to relax restrictions related to the pandemic in recent days.
Credicorp Capital also highlighted that added to the healthy recovery rate observed in the first quarter, 2020 had a stronger than expected closing and this year has seen a boost from higher oil prices.
Finally, the firm believes that this outlook may provide some relief on the size of the fiscal adjustment needed in the short term, “especially amid growing social demands.”
Even so, he acknowledged that uncertainty remains high and that the greatest risks come from longer-than-expected social tension and the non-approval of a tax reform, which, however, is not our baseline scenario.
