Essay on Colombia And The International Crisis

1143 Words Apr 10th, 2016 null Page
For Colombia, the year 2008 was characterized by a decreasing economic growth. This was generated by a number of factors, the key ones being the contractionary policies on the monetary and fiscal spheres, and the great financial crisis (G.F.C.). According to the Banco de la Republica (Colombian Central Bank), “The international crisis hit Colombian economy in a moment when the economic dynamism was already decreasing, after years of rapid growth. This slowdown is the result of a restrictive monetary policy, the impact of the rise in the prices of basic goods to both producers and consumers, and the restrictions imposed by some commercial partners (Venezuela and Ecuador).”
From 2002 until 2007, Colombia had entered an expanding cycle on its economy due to the favourable international conditions that allowed its economy to have a good performance on its trade balance, product of the strong performance of the commodity markets, that subsequently increased the price of these products due to the rise in the quantity demanded. As the quantity and price of the exports increased, economic growth was experienced during the period before the GFC, ending with a GDP growth of 6.9% in 2007. Although there was no GDP contraction in 2008, 6 years of sustained economic growth in Colombia and in the Latin American region were suddenly impacted by a slower growth rate of 3.5% in 2008 and a shocking 1.5% in 2009. An important observation is that part of the economic growth reduction…

Related Documents