MEXICO CITY (Reuters) - Colombia’s government is working on a stimulus plan, including potential tax breaks and lower energy costs, that could boost economic growth by 1 percentage point a year, Finance Minister Mauricio Cardenas said on Saturday.
Growth in the Andean nation has slowed as a stronger peso currency hurts exporters’ bottom line and erodes a windfall from high dollar-denominated commodity prices in recent years.
A series of weak data on industry, exports and agriculture has added to concerns about the slowdown.
“There are very good ideas such as cutting energy costs, there are good ideas related to seeking to improve the infrastructure of our country, the logistics, so that there is more investment in these sectors,” Cardenas told Reuters.
“We are putting together the whole structure of a ‘shock package’ that will have fiscal measures, trade measures and measures targeting counterfeiting,” Cardenas said in an interview in Panama City, where he was attending an Inter-American Development Bank meeting.
Cardenas told local radio on Tuesday he expects economic growth to have been between 3.8 and 4 percent last year, down from a 5.9 percent expansion in 2011.
“I think we will seek measures that seek an additional (percentage) point of growth,” he said on Saturday. “We will have the measures ready in two or three weeks.”
Colombia is not alone in seeking to boost growth after a global commodities boom supercharged South American economies in recent years. Brazil, Latin America’s top economy, has taken a slew of measures to revive growth after its economy cooled sharply in 2011 following a period of rapid growth.
Colombia has already tried reducing production costs for industry, raising tariffs on textile imports, and increasing dollar purchases to fight the peso’s strength.
The central bank has cut its benchmark interest rate by 150 basis points since mid-2012 and policymakers are expected to cut another 25 basis points next Friday to 3.50 percent.
Reporting by Luis Rojas; Writing by Michael O'Boyle; Editing by Mohammad Zargham