WASHINGTON – The International Monetary Fund (IMF) yesterday announced that it has raised by US$6.5 billion (RM27.1 billion) a credit line offered to Colombia to about US$17.2 billion, aiming to help the country cope with the economic effects of Covid-19.
“The augmentation was approved in light of Colombia’s continued qualification with very strong institutional policy frameworks, track record of economic performance and policy implementation, and against a backdrop of higher external risks and a larger-than-expected adverse impact from the Covid-19 pandemic,” said the Washington-based crisis lender in a statement.
Colombia has had a flexible credit line (FCL) since May 2009, and the IMF board has renewed it every two years, providing the country with money that can be deployed to head off a crisis.
The latest renewal in May was for US$10.8 billion, but deputy IMF managing director Antoinette Sayeh, in a statement, said Colombia’s downturn is deeper than expected and the nation is set for its worst recession on record.
“The augmentation of access under the current FCL arrangement will help Colombia manage heightened external risks, protect ongoing efforts to effectively respond to the pandemic, continue to integrate migrants from Venezuela, foster inclusive growth and reduce external vulnerabilities.”
IMF mission chief for Colombia Hamid Faruqee said the country’s economy is expected to shrink 8.2% this year, worse than the 2.5% drop originally forecast.
“We do expect growth to rebound,” he said, predicting the gross domestic product increasing 4% next year.
Colombia is one of five countries that have received an FCL, along with Chile, Mexico, Peru and Poland, which exited the arrangement in late 2017.
None of the countries has drawn on the funds, said the IMF. – AFP, September 26, 2020
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