Without investment there is no growth and the regions can help: Grupo Aval

Finding alternatives that help the country ensure significant growth and leave behind the bad streak it has been experiencing for more than a year, remains the priority of analysts and economic groups in the country, who have even begun to look at the regions as key allies in the fight to recover. the good step and closing the social gaps that are most noticeable in the most remote areas.

This was made clear during the installation of the forum ‘Reactivating the economy with the regions’, held by the Corficolombiana research team this Wednesday – July 31 -, where María Lorena Gutiérrez, president of Grupo Aval, said that the pace of the Colombian economy is slow and heterogeneous and forces us to call on everyone not to stand still in the search for solutions.

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In her speech, the representative of one of the most important financial conglomerates in the country, highlighted that the advances shown by the ISE and the GDP throughout the year have been driven by the public administration, which is not sustainable in the medium term. She also recalled that economic growth was only 0.6% in 2023 and 0.7% in the first quarter of 2024, figures that reflect a marked slowdown.

“After the pandemic we had very high growth, in 2021 and 2022“But these were the result of the economic adjustment process, rather than of a real dynamic of the economy, and therefore were accompanied by high inflation and external imbalance. After this, the process of adjustment to reality has led us to modest numbers, such as those we saw in the contraction of the third quarter of the year,” said Gutiérrez.

Focus on investment

Given the bad times and the fact that things are not moving well, the President of Grupo Aval focused on one of the causes of the slowdown, emphasizing investment, a point that for her requires urgent actions such as linking all the necessary sectors, especially in the regions, where she said there is a lot of potential to promote projects that generate development.

“I, personally, have insisted that the fall in investment must be reviewed, “Because that is the seed of growth and unfortunately it was reduced by about 25% in 2023 and by 15% in the first quarter of this year, a trend that is maintained in the data we have observed recently. I assure you that without investment there will be no growth, there will be no employment, nor will there be an end to poverty,” explained María Lorena Gutiérrez.

In this regard, he added that “we estimate that potential growth could be reduced with these investment data, by around 3% to 2.5% and I insist, this is critical. Positive signals emerge, and they are confusing in this analysis, such as those we learned about a few weeks ago with the monetary poverty data for 2023 in the country that showed a positive reduction of 3.6 percentage points, although the most notable thing is that this decrease was mainly due to the increase in labor income, that is, the increase in employment, but this progress would be at risk if we do not manage to recover the investment.”

Calling the regions

María Lorena Gutiérrez stressed that the regions are key to economic recovery and that infrastructure and housing projects are essential, but they require the support of local governments, which is why the contribution they can make must be taken into account, as well as take advantage of their knowledge of the territory to guarantee success stories that drive development.

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“The regions are called to lead this reactivation agenda, and therefore, this event is the beginning of that desire that I have been thinking about for some time. In addition, the recent context confirms it. This week we learned about the draft General Budget Law of the Nation, which demonstrates the narrow margin of maneuver that the National Government has, this year and next, not to mention that they talk about a financing reform and the modification of the fiscal rule,” he explained.

He also indicated that it is clear that the sectors to be promoted there are infrastructure. and housing, so that industry is also supported, and here it is essential that municipalities and departments present projects to promote them, paying attention also to ensure that bureaucracy does not hinder the arrival of results.

“The National Government can boost economic activity with projects such as infrastructure and housing, but in the end they need the support of the regions to carry out these works. In addition, local governments can make use of additional resources, such as works from taxes, royalties and private initiatives that are within their reach. What is required is execution, execution and more execution, in a framework of legal and physical security that restores confidence,” he warned.

A strong commitment

Finally, the President of the Aval Group highlighted the commitment of the organization with the economic reactivation and for this purpose has prepared an action plan that covers sectors such as housing, energy transition, SMEs, the popular economy, industry, tourism and agriculture. However, he stressed that the success of this depends on the consolidation of public-private programs and the increase of resources for the financing of strategic sectors.

“Yesterday, funding was approved for the largest solar farm in Colombia, which you will soon hear about, but there are also SMEs, the popular economy, industry, tourism and agriculture. Our contribution will be even greater to the extent that the National Government consolidates other programs and increases the resources allocated to rediscounts in strategic sectors for reactivation. Here I take the opportunity to say that forced investments make no sense,” he concluded.

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For Gutiérrez, although the recent announcements of reactivation have been important and encouraging, it is time to take action and execute the planned actions, since the slowdown cannot wait and It requires everyone to work together, always thinking about achieving well-being for the communities.