Economic Growth in Colombia

Abstract

In all countries, economic policy goals are very important. Undoubtedly, economic growth is very important because economic activity influences many aspects, including employment creation, poverty reduction, and government revenue. Moreover, as Amartya Sen notes, growth is not the same as economic development, but it is a means to achieve it.

Growth in Colombia has been declining, even before the coronavirus pandemic. In 2020 it fell substantially to -7.2%; while, in 2021 and 2022, it rose considerably to reach rates of 10.7 and 7.5%, respectively. In these last two years, the high growth is explained, in large part, by expansive monetary and fiscal policies, as well as by the favorable terms of trade and the increase in remittances. However, growth in 2023 was just 0.6%.