Reuters/London
Colombia’s economy faces its greatest risks this year from instability in neighbouring Venezuela and the slump in commodity prices, the country’s finance minister said yesterday.
Growth forecasts for the Andean country are likely to be downgraded, with 4.4%-4.5% a likely rate for 2013, Mauricio Cardenas told Reuters editors and Reuters Television.
Future growth however could see an annual boost of two percentage points, thanks to planned increases to infrastructure spending and if peace talks with Marxist-led FARC rebels - due to restart today - succeed in ending half a century of insurgency.
“We are going to make an announcement by the end of this week of between 4.4% and 4.5%, we are revising our projections a little downward,” he said of the growth forecast which is currently at 4.8%.
The exact revision is dependent on economic data coming through this week.
Falling commodity prices are an issue for Colombia, whose main exports include oil, coal and coffee. The other worry is Venezuela, which is facing shortages of basic goods from toilet paper to wheat flour, raising fears of instability.
“Developments in Venezuela are very important to us - a stable growing economy in Venezuela is very important from Colombia’s perspective,” Cardenas said.
He added Colombia has been talking with Venezuelan ministers about the possibility of offering food for oil, or food for future oil reserves.
“We are very dependent on commodity prices, and whatever happens to future oil prices,” Cardenas said. The government was likely to keep a Brent crude oil reference rate of around $100 a barrel for budget purposes, he said, not far below the current $104 level.