As of May 19, the Hernán Echavarría Olózaga Institute of Political Science (ICP) made an x-ray of the development of the Colombian economy on nine key indicators:
1.- Tax collection
For March, the tax collection reached $19.86 trillion, 13.64% more than in March 2022. Cumulatively, since January 2023, the amount collected amounts to $64.37 trillion, 20.48% more than in the same period in 2022 We have observed that the payment of the public debt is being the main destination of the collection (18%), education (14%), finance (13%), health (12%), and defense (8%), are also among the main destinations.
We observe that, in nominal terms, that is, without taking inflation into account, this collection would represent an increase of 20.7% with respect to the amount collected between January and March 2022. In real terms, the growth in collection between January and March 2023 has only grown 6.5% compared to what was collected in March 2022.
2.- Fiscal deficit
Still waiting for the data available for the first quarter of 2023, the value for the fourth quarter of 2022 amounted to $28 billion. This amount, added to the accumulated amount of the previous quarters, represented a total of $77 trillion for 2022. The deficit represented 5.29% of nominal GDP in 2022, but 7.95% of real GDP. It is common for the deficit to be measured relative to nominal GDP because the amount of debt is also expressed and paid in nominal terms. However, it is worth establishing the comparison with real GDP to know the magnitude of the deficit on what we are actually producing as an economy.
deficit interest
About 78% of this deficit is financed internally, the remaining 22% through foreign loans. The amount of interest on the deficit for 2022 amounted to $63 trillion, which represented an increase of 59.2% compared to that of 2021. This increase is the second highest since 1996, the year in which they increased by 81.3 %. The fiscal deficit of 2022 is lower than that of 2021 ($83 trillion), and that from the second half of 2022 the country risk began to rise, reaching its highest values between 2022 and 2021 in October.
3.- External debt
The latest data available is for February. For the month, the external debt amounted to US$187,772.11 million (54.47% of GDP), with an increase of 8.68% compared to February 2022. Of the total debt, US$106,982 million (57 %) corresponded to public debt, and US$80.790 million (43%) to private. 16.41% of the debt matures in the short term, 83.59% in the long term.
The total value of the external debt converted into Colombian pesos at an average rate of $4,500 equals $844 billion ($16.6 million per capita).
The amount of private external debt at a TRM of $4,500 is equivalent to $363 trillion.
4.- Employment
For March, the unemployment rate was 10.03%. It decreased 1.32 percentage points (pp) compared to February. Analyzing the occupational position of workers allows us to conclude that this monthly decrease did not necessarily translate into the creation of new jobs by the private sector. An increase in the number of people employed by the government was observed, and that the increase in jobs generated by the private sector occurred in jobs with low qualifications or stability.
The occupational positions that showed increases in the number of employed workers compared to February were, in order, “government worker or employee” (10%), “unpaid family worker” (5%), “worker, or individual” (3%), “own-account worker” (2%). Given that unpaid family workers are part of the informal labor market, we conclude that part of the decrease in the unemployment rate in March implied the incorporation of new informal workers into the labor market.
5.- Exports
In March, exports presented a decrease of -9.97% compared to the previous year, reaching a value of US$4,462.86 million.
Although the export of fuels and products from extractive industries continues to be the main product of the export basket (with 50.61% of the total), there was a decrease in the value exported compared to March 2022 (-16.31% ), and as of February 2023 (-3.31%).
In March the participation of oil in the export basket was equivalent to 26.91%. For this concept, we exported US$1,200.81 million, 40.23% less than in March 2022, and 5.05% less than in February 2023.
6.- Imports
In March, imports reached a value of US$5,856,798 million, presenting a decrease of -17.08% compared to March 2022. 74.1% of the basket was made up of manufactures. We observed a concentration of import destinations in the capital, 51.09% of imports arrived in Bogotá, other main destinations were Antioquia with 15.11%, Valle del Cauca with 8.44%, Cundinamarca with 7, 55%, and Bolívar with 5.43%.
Today Colombia has free trade agreements from which about 64.90% of imported products come.
7- Retail
Real retail sales fell in March compared to the previous year and at the beginning of 2023. They presented a real annual decrease of 7.07%, and a decrease of 2.17% year-to-date. Since the beginning of the year, we have observed that some of the largest decreases in retail sales occurred in a type of items that we could classify as luxury items for households, since they are not included in the first three categories that prioritize consumption according to DANE: (i) accommodation and public services; (ii) food and non-alcoholic beverages; (iii) transportation. Thus, the following fell: household appliances (-15.4%), sound equipment and apparatus and televisions (-13.9%), motor vehicles and motorcycles (-9.0%).
8- Gross Domestic Product
For the first quarter of the year, Colombia’s GDP was $237 billion. This value represents an increase of 3.0% compared to its value in the first quarter of 2022, a period in which it grew at an annual rate of 8.2% compared to 2021. Mainly made up of activities associated with trade, repair of vehicles, transportation and storage services, and room and board services.
We observe a decrease in economic activity, especially in the manufacturing industry sector, which presented annual growth of 0.7%, well below the 10.4% it grew a year ago. The behavior of artistic and entertainment activities was also lower compared to the previous year: its annual growth of 18.7% contrasts with the 41.7% reported a year ago. Construction falls: with a decrease of 3.1%, it differs from the growth that it presented last year: 5.8%. Financial and insurance activities are strengthened: growing at a rate of 22.8% in contrast to a decrease of -3.1% that they presented the previous year.
9.- Inflation
Annual inflation for April was 12.82%. Inflation for the year to date (which shows us the increase in prices since the beginning of the year) was 5.38%. Monthly inflation was 0.78%. In April, transport was the one that presented the greatest increases since the beginning of the year (8.88%). If we consider that extra and regular gasoline are products that fall within this expense division, we conclude that part of the inflation for the year to date is due to the rise in their prices to overcome the deficit of the Fuel Price Stabilization Fund. .
Annual product inflation was 3.86%, year-to-date inflation decreased by 1.06%, and monthly inflation by 1.34%.
main facts
According to the ICP, the political instability with which 2022 closed represented an economic burden for citizens and the government itself: it devalued the Colombian peso, reducing the purchasing power of workers’ salaries, and the amount of taxes collected by itself. to cover its operating costs, and the payment of the sovereign debt; resulting in a greater weight of the fiscal deficit over real GDP. This fiscal deficit rose mainly due to an increase in the value of the interest that the government must pay to international lenders as a consequence of an increase in country risk. The decreases in unemployment and inflation are apparent and require measures that contribute to increasing the participation of the private sector in the generation of jobs, as well as aimed at reducing government spending, managing to reduce the impact of taxes on final prices. that consumers pay.