Colombia Outlook. Second Quarter 2020

Summary

Colombian GDP will contract around 3% in 2020, as a result of COVID-19 and oil price reduction. Due to confinement, sectors will reduce output with effects on employment and social indicators. Inflation will moderate driven by a weak demand and despite the exchange rate depreciation. The central bank will reduce rates.

Key points

• Key points:
• Strong impact of COVID-19 on global growth produces an unprecedented public policy reaction
• The effects on the Colombian economy depend both of the advancement of the sanitary crisis as of the policy response
• Sector effects will be heterogeneous both in the confinement and recovery periods
• Private consumption and investment will respond with significant contraction in 2020, to then recover gradually
• The piority of the measures to confront this situation is to protect emploument and the wellbeing of Colombians

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