The Organisation for Economic Co-operation and Development expects Colombia's economy to grow 3.4% in 2019 and 3.5% in 2020, but warned about important external risks including trade tensions, geopolitical uncertainties and weaker advanced economies.
The OECD considers the country's economy resilient and well equipped to handle an adverse external environment; but it also expects the country to pursue reforms to reinforce economic growth.
"The challenge facing policymakers today is to put the economy on a path to stronger and more inclusive growth, with the benefits shared among more Colombians," OECD Secretary-General Angel Gurría said in a statement. "Courageous structural reforms will help Colombia converge with OECD living standards, reach its potential and achieve a more inclusive economy."
The survey points to the need of reforms to revitalize productivity growth, which has come to a halt in the last 10 years and is below the standard in Latin America.
The reforms the OECD believes the government should seek include reducing tariffs and the scope of non-tariff barriers to trade, supporting entrepreneurs and making finance more accessible.
According to the survey, "to ensure sound public finances while creating space for dealing with potential future shocks, Colombian macroeconomic policy will need to strike an appropriate balance," which should involve a continuous decrease in the budget deficit, to 1% of GDP by 2022, in accordance with the fiscal rule.
The OECD believes that tax reforms should seek to enhance redistribution, increase revenues from environmental taxes, and strengthen tax management to reduce tax evasion. Expanding personal and value-added taxes, cutting the corporate tax rate and removing a number of tax exemptions should also be considered.
The survey also points to the necessity of reforms in the pension system to reduce poverty in the aged population and ensure sustainability.