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Why did economic growth in Colombia increased in 2010

economic growth in Colombia increased in 2010The BBVA revised upward its forecast for growth of the Colombian economy in 2010 and estimated to increase at least by 3% due to increased levels of investment and good dynamic macroeconomic figures show.

The Research chief economist at BBVA Colombia, Juana Tellez, estimated according to analysis by the financial institution of the Andean country’s economy will grow in the order of 3.0% and 4.4% this year.

“We have revised our growth forecast and even do not rule out further revised upward if the improvements in the indicators of activity are strengthened in the coming months,” the expert said at a news conference.

He indicated that likely increases in investment in machinery and recovery of building permits could anticipate an increase in stronger than forecast in private investment.

However, the drastic reduction of trade with Venezuela could have permanent effects on certain sectors of the economy that have found no effective markets to replace trade with Venezuela, “frozen” since last August by order of President Hugo Chavez.

Tellez said that although Colombian exporters have succeeded in replacing the Venezuelan market with sales to other South American countries, Central and China, enough work to overcome the difference of what has been lost in recent months by the decision of the Government of Venezuela.

As to the behavior of inflation, BBVA Research predicts that this indicator will be located at 3.4 percent in 2010 and 3.2% in 2011.

The Government expects the economy to exceed the growth target this year, expected at 2.5% due to the success of the first quarter.

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