巴黎银行-哥伦比亚-宏观经济-哥伦比亚：现在有多快？

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1、Colombia:Howsoonisnow?Author:LuizEduardoPeixotoThegovernment’stargetfornominaldeficitnextyearseemstoughtoreach.EconomistChangesmadetothebudgetbillinCongresshaveincreasedspendingprovisionsfor2018.BancoBNPParibasBrasilSARiskstothecurrentratingassessmentcomefrom

2、sluggishgrowthandfiscalrule.Theoriginalversionofthisarticlewaspublishedon7December2017.PublicinvestmentsgainedGovernmentspendinghasgainedtractionthroughouttheyear.Aftersignificantcutsmadesincetractionthisyeartheplungeinoilprices,publicsectorinvestmentshavebeengr

3、owingaround7%y/y,helpingavoidaweakershowingineconomicactivitynumbers(Colombia:Newgrowthdriversapreciouscommodity).Inthepast,spendingroseAlthoughthereisalawthatlimitspublicspendingsixmonthsbeforeapresidentialelection,anbeforeelections…analysisofgovernmentspending

4、duringpastelectionsshowstherehasbeennodeclineinspendingduringthatperiod(seeChart1).Infact,spendinghasacceleratedinthemonthspriortoelections.Thisisbecausethelawdoesnotimposerestrictionsinspendingperse,butonlyonnewprojectsduringtherestrictionperiod.…butdecelerated

5、rightThegoodnewsisthatmostnewgovernmentstendtotightenthebeltsoonafterassumingafterwardsoffice,thusincreasingexpectationsforafiscalconsolidationprocess.Accordingtothecurrentfiscalruleinplace,Colombiawillhavetostepupitseffortstocomplywiththetargets(seeChart2).Oner

6、iskisthatthefiscalruleisbenttoaccommodatespendingortaxcuts,asdifferentpresidentialcandidatesaresuggesting(seeColombia:ElectionTracker)FiscalruleimpliesnonTherule,whichimpliescutsofaround1ppineachofthenexttwoyears(seeChart2),seemstrivialcutsin2018-19challengingin

7、thefaceofanunflexiblespendingstructure.Inourcalculations,closeto90%ofColombia’sbudgetisnotsubjecttoquickcuts–moreage-relatedspending,andtheeffortsagreedinthepeaceprocessmeananevenmoreplasteredbudgetedinthenearterm.Besides,theinfrastructureprojectunderwayalreadyc

8、ompromisessignificantlythebudgetfor2018andthesubwayprojectforBogotácouldsignificantlyimpact2019accounts.Thisexplainsourbelowgovernment’sbudgetbalanceforecastsforthisy