The IMF stated that Colombia’s productivity has stagnated over the past 30 years
Productivity decreased by over 10% in the 1990s in Colombia and has remained at that low level.
Following the study presented by the International Monetary Fund, President Gustavo Petro asserted that his government inherited a country burdened with hidden billion-dollar debts.
The International Monetary Fund (IMF) presented a report warning that Colombia’s economic growth is hindered by low productivity, which has stagnated over the past three decades. The report also provided a series of recommendations related to exports and the fiscal framework.
Among the main points, it stated that the country should begin to diversify its export basket to ensure future sustainability and should not neglect the fiscal framework in order to improve the current account.
Regarding productivity, the study suggests that Colombia is wasting resources, especially in sectors such as agriculture, construction, and services. It recommends addressing this issue through policies that promote productivity and growth.
On exports, the IMF noted progress in diversifying Colombia’s export basket between the 1960s and 1990s but sees stagnation since the early 21st century, along with a negative balance since the 2008 global financial crisis.
The report states that for Colombia to achieve fiscal consolidation, it must focus on better tax control and investment, as well as state spending, something that has already worked in other Latin American countries.
The IMF asserted that Colombia’s productivity has stagnated over the past decades, impacting various development aspects in the country, especially economic growth.
“Productivity decreased by over 10% in the 1990s in Colombia and has remained at that low level until 2019. Recent estimates suggest that TFP has not grown since 2019, as productivity growth in the years following the pandemic was barely sufficient to compensate for losses during the health crisis.”
The study identifies four factors affecting total factor productivity (TFP), although it notes that this varies depending on the sector. Technology is one of these factors; the report indicates reluctance at the enterprise level to adopt these systems, particularly in mining.
Another factor is that in manufacturing industries and agriculture, there are barriers to market participation, and those that become highly competitive fail to reach the ideal percentage, leading to a slowdown in productivity.
Finally, there is a dilemma with the entry and exit of companies, as highly productive companies are not entering the market.
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