The worst has passed for Colombia's economy-finmin
* Finmin expects economic growth of 4.6-4.7 pct in 2012 * Govt to present tax reform by 1st week of Oct By Jack Kimball BOGOTA, Sept 18 (Reuters) - The worst has passed for Colombia's economy and Latin America's fourth-largest oil producer has begun to rebound after a series of poor data earlier this year cut into expansion, Finance Minister Mauricio Cardenas said on Tuesday. Latin America's No. 4 economy has been hit this year by the euro zone crisis and slower world growth, which dampened demand for Colombia's exports, forcing the central bank to cut its benchmark interest rate to spur growth. "The Colombian economy is going to maintain a good growth rate, because while the second quarter had a setback especially in industry, what one sees with July data is that the worst has already passed," Cardenas told local "Radio W". "The economy had a bad time there in March, April, but it took off again." Cardenas said he believed the economy would grow between 4.6 percent and 4.7 percent this year compared with the official government target of 4.8 percent. The economy probably expanded 4.38 percent in the second quarter, the lowest rate in a year and a half, hurt by weak growth of industry, trade and exports, according to the median of 32 analysts polled by Reuters on Monday. Cardenas believes the country grew 4.6 percent in the April-June period. Regionally, Colombia's growth would compare with expansion of 4.1 percent in Mexico, 6.1 percent in Peru and 5.5 percent in Chile. Official Colombian data will be released on Thursday. Fallout from a weakening global economy has forced the central bank to cut rates at the last two policy meetings to boost growth while inflation remains near the mid-point of the monetary authority's 2 percent to 4 percent target. The Andean country has attracted billions of dollars in foreign direct investment over the last decade boosting oil and coal output after U.S. military aid helped Colombia deal crippling blows to leftist guerrillas and cocaine cartels. Pro-market macroeconomic policies and improved security won praise from the three major Wall Street rating agencies all of which upgraded Colombia to investment-grade status last year. Cardenas, who took over the finance ministry two weeks ago in a cabinet reshuffle, said that the government would present a much-awaited tax reform in the first week of October at the latest, and hoped to have it approved in December. While details of the upcoming tax reform have not yet been released, it will be part of structural changes Colombia is making such as an earlier reform of mining and oil royalties. "We're working hard to refine what will be this legislative package that'll include a tax reform, not the mega reform, not the major structural reform to solve all the country's tax problems, but a first step in the right direction," he said. "What we want is to solve problems, eliminate distortions, correct a very complex statute, simplify, and we're not aiming for collection, we're simply aiming to improve our tax system."
- Tweet this
- Share this
- Digg this