The position of the Minhacienda: ‘It is not true that the Colombian economy is going badly’

One of the debates that has gained the most strength in recent weeks in the country has to do with the current state of the economy, since for some sectors there are still erratic results that show that the slowdown is in force, while others, such as the Ministry of Finance, highlight that things are not bad.

In a recent report from his portfolio, Minister Ricardo Bonilla referred to this and highlighted that the indicators show that Colombia is advancing in the best way, in a context in which there has been no marked growth since more than 10 years ago and in which the pandemic aggravated “serious structural problems” that already existed.

Bonilla González began by saying that “it is important to say that the economy has not grown, at least, since 2011, which indicates that it received the pandemic with serious structural problems and accumulated a long decade of economic weakness” and that it is not true that the rebound After this episode it was not a sign of a buoyant economy.

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“This situation is equivalent to imagining a patient entering care intensive procedures to resuscitate him, where after the procedure we will have to wait if he survives. Something similar happened in 2021 and 2022 and that is why the period 2023 and 2024 is the moment of truth. But, it is a mistake to compare these results with those obtained two years ago, when the patient was being resuscitated,” he explained.

After this, he pointed out that it is not true that there is an economic recession either, since for the experts in his portfolio, a recession occurs when two or more consecutive quarters reflect negative contractions in production (GDP) and this has not yet happened, although he recognizes that there was a threat of it happening during the second half of last year.

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“The data finally showed that the economy did not enter a recession and is now showing recovery. For example, the greatest threat of recession occurred in the July-September quarter of 2023 when the economy decreased -0.7%; but, in October-December it grew 0.3% and “In the first quarter of 2024, it grew 0.7%, which indicates that the specter of recession has faded,” he added.

Indicators

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With this in the picture, they maintain that the country has already had its forced landing and that what is being experienced at this moment is part of the recovery process that was expected, to which it must be added that this Government committed to moving forward on three fronts. development (energy, economic and fiscal) to promote sustainability in the country and move towards a more fair and equitable tax system.

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To prove its point, the Ministry of Finance noted that in addition to GDP, In Colombia there is the Economic Monitoring Indicator (ISE), in which, according to them, significant growth and signs of recovery for the market have been observed, in addition to identifying trends and cycles of economic activity.

Industry.

“In its latest measurement, where it produced results for the month of April, the ISE grew 5.5% compared to April 2023, undoubtedly a good economic result since in March it had been -1.5%. Although it does not yet represent a solid growth result, it is very important due to the jump obtained and must have sufficient echo in order to counteract inaccurate information that is often presented in economic matters,” said Minhacienda.

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On the other hand, they highlighted that 22 industrial activities, out of 39 in total, registered positive variations in their real production, where the manufacturing of other types of transport equipment stands out; other manufacturing industries; basic iron and steel industries; production of cocoa, chocolate and confectionery products; and the manufacture of electrical appliances and equipment, plastics and footwear.

“Another indicator that contributes to a good economic balance and that can also be interpreted as a sign of confidence in the country and the economy, is Foreign Direct Investment -FDI,” they added.

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Regarding the latter, they were emphatic in saying that “it is not true that during This government, FDI has decreased, quite the opposite, while in 2018 and 2019 US$8,700 and US$10,280 million in total from FDI entered the country; In 2022 and 2023, US$11,263 and US$13,068 million entered, in other words, investment continues to arrive in the country and in higher volumes than previous years.”

Informality.

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The Ministry of Finance also took advantage of the Report of the 1,000 largest companies in the country for the year 2023, carried out by the Superintendency of Companies and in which it can be seen that the results in general terms are encouraging because operational income grew 7.8% with respect to the year 2022, going from $1,217 to $1,313 billion.

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“On the profit side, there was a reduction from $138 billion to $99 billion, but it is a figure similar to that obtained in 2021. In addition, these results should also be interpreted as indicators of confidence in the economy and reflect the commitment of the relationship between the government and the real sector,” said the Ministry.

Finally, among the arguments of this entity to confirm that the country’s economy is progressing well, it was highlighted that tourism is reaching levels that for them mark a “historical record”, after exceeding 5.8 million visitors, a figure that It surpasses the record of 2022 when nearly 4.4 million visitors entered the country.

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“Although some believed that this would not be possible, the facts are irrefutable.. This initiative has allowed cruise ships to arrive in places in Colombia that were previously unthinkable, such as La Guajira, Buenaventura and the Amazon, which represents a substantial change in the way operators, companies and tourists value the country. Without a doubt, this achievement is the result of a strategy that has positioned the country among the world’s tourist destinations,” they said.

Tourism

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With this, they confirmed that one of the Petro Government’s bets (tourism) becomes an activity that has been showing important progress in generating employment, foreign exchange and is positioned as the alternative to leverage the energy transition, while they highlight that some centers of Studies and economic reports describe the recovery of Colombian tourism as a conclusive fact.

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After these arguments and figures from the Ministry of Finance, Ricardo Bonilla stated that they will continue working as they have done so far, making it clear that things are going well in a context of economic recovery. which requires walking carefully and creating the signs of calm that have been seen so far.