Colombia’s central bank needs to cut interest rates since inflation is slowing and tight money is hurting growth, President Gustavo Petro said.
(Bloomberg) — Colombia’s central bank needs to cut interest rates since inflation is slowing and tight money is hurting growth, President Gustavo Petro said.
“The real economy is shrinking basically due to high interest rate,” Petro said in a post on the social media platform X. “I ask the central bank to lower it, given that we have controlled inflation”.
Petro’s comments come after the second quarter gross domestic product report showed that the economy shrank 1% from the previous quarter.
The government needs to implement a countercyclical fiscal policy that includes cheap and subsidized lending, he said.
Read more: Colombia Economy Contracted More Than Forecast in Second Quarter
Colombian inflation slowed to 11.8% last month, which is still more than triple the 3% target.
The central bank has disregarded unsolicited advice from all four Colombian presidents over the last 20 years. Policy makers held their policy rate unchanged at 13.25% at their last two meetings.
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