Fiscal prudence
The OECD additionally considers that the primary dangers to the Colombian economic system are “the rising fiscal and present account deficits (…) that go away no room for dangers,” which is why it recommends “fiscal prudence.”
“A prudent fiscal coverage is vital to debt sustainability” and to “care for the deliberate trail of fiscal consolidation and conform to the fiscal rule,” he provides.
The projections additionally draw consideration to the rate of interest, which stays prime, at 9.75% in November, even supposing in December 2023 the Financial institution of the Republic (financial authority) started a cycle of charge cuts.
“The versatility of financial coverage must proceed with warning,” exactly as a result of the massive fiscal and present account deficits, provides the OECD, consistent with which “it’s anticipated that the central financial institution can proceed its cycle of slow flexibility” supported via the decline of inflation.
The projections additionally spotlight the wish to, within the medium time period, “cut back budgetary rigidities” and perform “a complete tax reform” to rebalance the load from company source of revenue to team of workers, in addition to “cut back tax expenditures, simplify the gadget and deal with tax evasion.
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