Juan José Echavarría, manager of Banco de la República, in an interview with El Tiempo – Sectars – Economy



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Juan José Echavarría, manager of the Bank of the Republic, is very positive about the achievements of the economy this year.

Inflation in January was 3.15 percent, very close to the 3 per cent target, and the exchange rate has been relatively constant and the position of the banks is firm.

The trading and business figures are good and the surveys that are expected from these two sections are: look good. But there are opportunities to rectify and see structural reform.

They would contribute to the growth of the country and its. improving their situation from emerging new economies.

It is worrying that high levels of inflation expectations are still high, close to 3.5 per cent.

In an interview with EL TIEMPO, Echavarría spoke of the challenges facing the country after tax reform and it was surprised that the private sector has not supported it stronger, after the Government is playing with VAT freedom to buy capital sales.

How can you see the beginning of the year as a result of the well-known figures?

Year is a & # 39; start well. The 3.15 per cent inflation in January was amazing, a figure even better than the 3.18 per cent with which we closed 2018. The economy can grow 3.5 per cent this year, and continue to the next of revival coming from 2017.

The economy can grow 3.5 per cent this year, which will continue with the revival coming from 2017

There is no exchange target at the bank, but the exchange rate has changed significantly, and it seems that the rate is almost 3,100 pesos; Distribute representatives and users.
The position of private banks is strong, and international capital markets look calm after a recent statement of levels of interest with a regulator. main bank in the United States.

What's your greatest help?

The expectation of inflation from senior agents and markets, is almost 3.5 per cent and that is disturbing me.

I think they'll be able to. fall suddenly, once and the uncertainty is to fall; It may be caused that the debate on funding law will be reduced.

Some of the analysts may see a significant increase in the exchange rate, or a strong impact of the minimum salary or moderate child.

I am calm and very confident that we finish its year near the 3 per cent level.

And the new basket Dane …

In a new basket in Dane, weight loss (from 30.1 to 37.4 per cent, non-official numbers), and food (from 28.2 to 24.3 per cent) and transport (from 15 to 24.3 per cent) is lost. , 9 to 12.6 per cent).

This could reduce the complexity of inflation in the coming years, as food inflation increases dramatically, with smaller household inflation.

How able can you see the growth of this year's growth?

A bank bank expects 3.5 per cent, although analyst's average is so advanced, with a repression of almost 3.2 per cent; the Government speaks about 3.6 per cent.

Last Friday we met about 30 businesswoman in Valle del Cauca and I was amazed.

The presence was bigger than any time before, and I did not see good news but.

For most of the entrepreneurs, the results of the second semester in 2018 were many; better than those of the first semester, and the results have been very good at the beginning of 2019.

And the news was good in all sections, including acquisition.

In the coming weeks we will meet campaigners in other areas.

What's the biggest for the country to grow in the future?

Colombia has grown at an average level very close to 3.5 percent in the last 5, 10, 15, 20, 25 and 30 years.

That is the level we can grow today without creating inflation.

In order to make additional structural reforms you need to build savings and produce. To build savings, the fiscal situation needs to be improved and ensure that young people are saved for their age; That is why there is a need for pension reform.

On the other hand, productivity has not grown in Colombia for decades ago, something that has happened in a number of emerging countries such as China, India and its. rest of Asian countries; What's happening in Chile, Peru or Mexico, is also in the area.

We need to stimulate education and look for Colombians, and build ports and roads.

The Asian, Chile, Peru and Mexico countries have used trade and accuracy to build global value chains, export and export. included. Not Colombia

The Asian, Chile, Peru and Mexico countries have used trade and accuracy to build global value chains, export and export. included. It's not like Colombia.

We need to grow over 3.5 per cent for the remuneration and income of column makers.

What do you think of the funding law?

The Bank rarely lists this case because we are the money and we are only doing it on the macro-economic issues.

As the Government also said, we believe it is important to comply with the fiscal rule. With the funding law, it is possible to comply with the rule in 2019, but there is still a shortage of around 0.6% of GDP, on average, for 2020 and 2021.

The Government has said that it has continued to work on its case and now it will carefully review its ability to & # 39; cut spending and subsidies.

I think it is odd that the private sector has not strongly supported the tax reform, since the government has taken a big step by agreeing that VAT will be paid on the purchase of capital assets.

That cost a lot of money and no previous government had done although it was logical and necessary.

It is a great inspiration for private investment and the ball is now at business court.

Business taxes have also been reduced.

What are you still seeing about the economy?

In addition to the fiscal deficit for 2020 and 2021, I do not talk about the following years, we still have current accountable relief, almost 3.9 per cent of GDP. The previous estimate of a technical team is & # 39; Bank -3.4 per cent.

This deprivation rate is not healthy, and is much higher than the prevalence of emerging countries. It is a variety that looks carefully at risk-making and international analysis groups.

Exports as well as oil will be small, and less than export. Another way to investigate that national savings are lower and less than investing. There is no important export product in the country from the flowers (and that was a number of years ago), and national savings are low. To build it, it is essential to develop the fiscal situation and ensure that young people are saved to fund their age.

Can the global dragging hurt the road?

The International Financial Asset has just released new growth projections for the world economy, slightly lower than in previous publications. But no significant changes will appear in the coming years.

In fact, there is always a risk in the impact of trade warfare; named Trump President. The capital markets have declined recently after the Fingalian calls in the United States. And I do not see major threats to international markets if we continue to see us; doing our homework.

What are you willing to move rates this year?

The policy interest rates fell 350 points between the period 2017 and April 2018, and their 4.25 percent proportion is broadly broad (less than 1 per cent). And it's been stable since April. The markets impact on two 25-point increments, one in April and one in October, but this is not the case; happening.

Income is expected to be inflation, and we will evaluate the change and the impact of the changes I mentioned: the exchange rate and the pass-through called, the salary lowest and impact climate.

There are seven board members, with a vision of each one about the future of inflation and growth. We see how they voted each time.

And if they needed to upload them …

As I said in January 2017, when I started my time as manager, the Bank will do everything to do at every opportunity. But I do not see big changes in our rates. There is nothing like the increase or reductions that happened in the past. Here, with current information. It always strives to face and you do not have to prepare to get involved.

ECONOMY AND BUSINESS

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