Colombia Outlook: Second quarter 2020

Danske Research Team Danske Bank A/S

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

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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Author

Danske Research Team

Danske Bank A/S

Research is part of Danske Bank Markets and operate as Danske Bank's research department. The department monitors financial markets and economic trends of relevance to Danske Bank Markets and its clients.

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