The Colombian economy grew 7.5% in 2007, surpassing even the most optimistic projections. Driven mainly by investment and private consumption, this fourth year of expansion marked a period of sustained growth unseen in Colombia since the 1970s. Economic policy shifted away from the fiscal issues that had caused concern in previous years to focus on curbing rising prices and the appreciation of the peso. Inflationary pressure led to the more active employment of monetary policy. Inflation was off target for the first time in years in 2007. The consumer price index rose 5.7%, well above the upper limit of the 3.5%-4.5% range set by authorities. The export sector continued to perform well. The central government also continued to exercise tight fiscal discipline, which compensated the deterioration of localgovernment balances.

Related Subject(s): Economic and Social Development
Countries: Colombia
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