BanRep's Blog: Situation and Outlook of the Colombian Economy
Whenever the monetary authority meets to make interest rate decisions, two key questions need to be answered: Where is the economy at? and Where is the economy headed? Answering these questions is no easy task. On the one hand, the lag in statistical information makes it difficult to have a complete overview so as to answer the first question. On the other hand, uncertainty about the future performance of local and external economic variables limits the accuracy of forecasts to answer the second question. This is one of the reasons why such decisions must be made cautiously, as it is never possible to have a desirable degree of certainty regarding these answers. By using the recently published report from the National Administrative Department of Statistics (DANE in Spanish) on the growth of gross domestic product (GDP) for the third quarter of the year, inflation data at the end of October, and other key indicators, this blog provides an approach to answering these questions.
