Zooms Is Colombia as Investment Grade?

The Colombian economy had been doing well the duty to restore the credit rating of investment grade, lost in 1999, but the international financial crisis has generated unexpected problems away from achieving the desired objective. "Having the degree of investment is a big step for which Colombia is not ready, at least not in the next one or two years. We have always had doubts about the fiscal situation, which could worsen as a result of the crisis?, He said, Moody's analyst Alessandra Alecci, generating unease among Colombians in general and among the business factors Colombian particular.Los come knocking outside the Colombian economy that initially had to fight against external inflationary pressures and must now cope with the slowdown in the global economy affects the dynamics of the Colombian economy, an economy that in recent times has increased its efforts to open up to the fiscal and external exterior.La of the Colombian economy were the two elements that prevented Colombia regain its investment grade. That is why the Uribe government has worked to improve both fronts, succeeding in reducing the tax gap and holding several Free Trade Agreements (FTA), to balance the books externas.Pero the international financial crisis represents a hit on both sides to next year.

While it was expected that in 2009, the fiscal deficit of Colombia increased by an increase in public spending (for defense and pensions), the global financial crisis will lead to slower growth of the Colombian economy (as revealed by Richard Francis, S & , P, the agency is reviewing its growth projections for Colombia, which will likely be down), will have implications on the level of tax revenues which will be reduced to aggravate the fiscal situation.

On the other hand, slower global economic growth will be translated into a lower external demand and increased competition in the local market of imported products. To make matters worse, last Friday, Ecuador, a key trading partners of Colombia, said he did not pay the debt due on Saturday (corresponding to the interests of its Global Bond 2012), according to the Ecuadorian site "El Mercurio ?, which has caused great uncertainty in that country, whose risk country was over last Friday, 4,000 points. The fact away from the possibility of investment grade, produces negative lead to the Colombian economy. This means moving away from the possibility that the country access to better interest rates to finance. It also implies a smaller volume and quality of investments in the country, which could have been achieved remain investment grade, and lower capital flows. This also has implications for job creation in the economy. For the Colombian business sector also represents a setback this novelty, and that it also is unable to access funding at lower rates, which limits the possibilities of inversión.Pero beyond that Colombia has been away from investment grade his government has been working in the right direction and finally to attain it (though I must wait a little longer).

Colombia is working hard to improve their competitiveness, attract investment, planning long-term growth of the economy, ensuring the necessary investments in infrastructure, in short, in Colombia is working in all those aspects that are key to ensuring the strength of an economy, which will eventually have to be recognized by rating agencies. To promote greater investment for example, the country has developed zones, as well as working to improve the business climate in the country (which is measured through an index prepared by the World Bank). Thus, Colombia already has approved 40 new zones to boost industrial production, competitiveness and innovation empleo.Además the related negative country's credit rating last week, Colombia had its mini-crisis caused financial and social a conflict of magnitude related to the fall of so-called pyramid firms (firms that raise money by coming to offer a stake of up to 300%) a scam involving thousands of savers colombianos.Si this fact well demonstrated weaknesses in the controls such entities (which should be regulated as financial entities), Uribe has demonstrated its ability to respond immediately recognizing the responsibility that rests with the government, while recognizing that financial superintendents and company lacked apply more action to stop these estafas.Este fact that can be isolated, demonstrates the responsiveness of the Colombian government and its line of action, which makes clear that while it may be inappropriate (as this failure observed in the control of these entities pseudo financial), seeks security in the country's economy.

This is an asset highly valued by investors, which will bring many benefits to futuro.Nos surely meet again tomorrow, Horacio Pozzo

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