IMF Opens New $8.1-Billion Credit Line to Colombia

This will be a kind of financial “cushion” to avoid unspecified crisis situations

Antoinette M. Sayeh

Colombia’s external debt, estimated at more than 225 billion dollars (comparable to 52% of the GDP of this Latin American country at the mercy of the drug trade), is complemented by another 8.1 billion, approved by the International Monetary Fund (IMF). As the IMF’s Deputy Executive Director Antoinette M. Sayeh clarified, the new credit line, extended for two years, falls within a broader program “aimed at helping countries avoid crisis situations,” which were not further specified.

That is, the Bogotá government will not receive this amount, but will be able to access this financial resource in case of emergency. “The new agreement will provide safeguards against external risks and maintain market confidence. The authorities intend to continue to treat this agreement as preventative,” Sayeh wrote in a press release.

From the IMF’s perspective, “Colombia has a reasonably sound economic foundation.” Nevertheless, the Colombian economy recorded a sharp slowdown in 2023, growing by only 0.3% year-on-year. The Monetary Fund forecasts that the economy is expected to grow by 1.1% this year, still below the average expected for Latin American economies. Earlier, the IMF slightly raised its estimate for economic growth of Latin America and the Caribbean to 2.0% from January’s forecast of 1.9%, slowing from 2.3% growth last year.