Colombia’s economy looks set to expand as much as 5.5% in 2011, overtaking the Central Bank’s original economic growth projection of 4.5% for this year, according to Central Bank President Jose Dario Uribe.
Uribe attributes this increase in the rate of growth to a strong expansion in credit and consumer confidence which have, combined, created “perfect conditions,” Bloomberg reported Sunday.
The growth projection may be revised to the new level officially in the next quarterly inflation report, which will be published in roughly three weeks, Uribe said in an interview in Washington Saturday during the semi-annual meetings of the International Monetary Fund.
“I see the Colombian economy in a perfect situation, on a very stable and very sustainable path,” said Uribe, who has a doctorate in economics from the University of Illinois at Urbana-Champaign.
The recent economic expansion has accelerated inflation, a development which has been exacerbated by the level of foreign investment climbing substantially within Colombia. As of last month, annual inflation in the country stood at 3.19%, up from the 1.84% five-decade low that was seen last year.
The peso has also been continuing its growth, reaching gains of 6.1% against the dollar for this year. This has been largely attributed to companies bringing in funds from overseas to pay local taxes according to Finance Minister Juan Carlos Echevvery.
However, Uribe insists that the type of capital controls seen in Brazil would not be needed in Colombia to rein in the peso because, for the moment, he does not see any clear evidence that the benefits would outweigh the costs.
Uribe went on to warn that consumers must be careful not to become overconfident and take on too much debt when the economy is strong.
“I’m not worried, but you have to always be alert that we don’t go mad and spend in excess,” Uribe said.
