Published on Tuesday, February 16, 2021 | Updated on Friday, February 26, 2021

Colombia | Structural current account and equilibrium exchange rate

Associated with the change in fundamental saving and investment variables that the Colombian economy has undergone in the recent decade, the structural current account and exchange rate are estimated in light of these changes. Likewise, forecasts are made for these variables up to December 2023.

Key points

  • Key points:
  • The average structural current account deficit is expected to be between 3.2% and 3.7% of GDP between 2020 and 2025.
  • The variability in the range of the structural deficit depends on the relative evolution of Colombia's fiscal balance compared to other countries.
  • External financing would be between 3.1% and 3.8% of GDP on average per year between 2021 and 2025.
  • Between 1996-2009 and 2018-2020, it is estimated that the real exchange rate was undervalued. In contrast, between 2010-2018 it was overvalued.
  • The long-term equilibrium nominal exchange rate (2023) would be 3,186 and 3,308.

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