Private consumption and investment have also decreased, the latter by 18% compared to the average of 22% between 2014 and 2019.
However, the organization also highlights that, for now, the slowdown has not affected the labor market and the inflation projection places price growth at 5% at the end of 2024 and within the 2-4% range in the second half of 2025.
OECD does not recommend reducing interest rates
In addition, high inflation (in October it was still at 10.48%), interest rates (13.25%) and “uncertain policies”, the OECD says, “will weigh on domestic demand in 2024”.
President Gustavo Petro has repeatedly asked the Bank of the Republic to lower interest rates but the OECD advises against it: “Monetary rules should avoid premature easing to ensure that inflation continues to be lowered.
And it also recommends that the Government “improve the effectiveness of public expenditure and income” to ensure debt stabilization and compliance with budgetary rules and leave room for an ambitious social reform agenda.