On 5 May 2016 the IMF published a report on the economy of Colombia following the conclusion of discussions under Article IV of the IMF’s articles of agreement.
Colombia achieved economic growth in 2015 of 3.1% which was one of the highest growth rates in the region. Growth was spurred by strong private consumption but private investment slowed and the lower oil prices led to a decline in exports and fiscal revenue. The government achieved revenue increases from the tax reform at the end of 2014. In 2016 growth will slow to 2.5% with a decrease in private investment.
The IMF recommends the implementation of a structural tax reform this year to allow more room to protect social spending. Domestic revenue mobilization should be stepped up by broadening the tax base and improving the tax administration. The tax system should be made more efficient and progressive to replace the revenues lost through the oil price fall.
The structural reform agenda should be continued to underpin economic diversification and inclusive medium term economic growth. Efforts should be made to improve the business environment, strengthen competitiveness and increase access to quality education.
