Prospectiva Económica, Octubre 2023

Abstract

2023 has proven to be a challenging year due to high inflation, the slowdown of the economy, local uncertainty and external shocks. In this edition of Prospectiva Económica we carry out an exhaustive analysis of the Colombian economy, starting from the international shocks that have impacted the country and addressing economic activity, the external sector, fiscal accounts, the monetary sector and finally the regional economy. During the first half of 2023, the world economy showed signs that predicted better economic performance than anticipated at the end of 2022. Growth data in the world's main economies, the United States and the Euro Zone, showed increases that, although mild, dispelled fears of recession for the current year and demonstrated that the adverse effects of the financial turbulence in the first months of the year represented transitory shocks. Consequently, various entities expect that at the end of 2023 a slowdown will be observed compared to what was observed the previous year. In the midst of a highly uncertain international context, in the second quarter of the year, Colombia registered a growth of 0.3%, which represents a deviation of 0.2 percentage points with respect to our projections. This result confirms the trend of economic slowdown that began in the first quarter and is developing in an environment marked by high interest rates and persistent inflation. In terms of spending, the economic slowdown observed in this second quarter of the year was the result of a persistent drop in investment and a notable slowdown in household consumption.