Colombia - Current economic position and prospects (Vol. 2 of 5) : Statistical appendix

RETURN TO RESTR I CTED REPORTS DES CIRCULATING ca Report No. WH- 188a WITHIN T BE RETURNED TO REPORTS DESK ONE WEEK lI GENERAL FILES This report was prepared for use within the Bank and its affiliated organizations. They do not accept responsibility for its accuracy or. completeness. The report may not be published nor may it be quoted as representing their views. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT INTERNATIONAL DEVELOPMENT ASSOCIATION CURRENT ECONOMIC POSITION AND PROSPECTS OF COLOMBIA (in five volumes) VOLUME II STATISTICAL APPENDIX TO MAIN REPORT December 30, 1968 Western Hemisphere Department  CURRENCY EQUIVALENTS (as of November 4, 1968) 1 U.S.$ = 16. 77 Pesos 1 Peso (Ps.) = US$0. 0596 1 Million Pesos = US$59, 630  STATISTICAL APPENDIX General Note Part I - National Accounts Part II - Balance of Payments Part III - Public Finance Part IV - Honey, Credit and Prices Part V - External Financing Part VI - Agriculture Part VII - Industry  General Note to Statistical Apendix 1. The Goverm-ent has declared that the objective of its economic program is to raise public invesment to levels wThich will ensure a sus- tained anmual growth rate of GDP of o percent in real tezms, while reducing the rate of increase in the overall price levela The basic purpose of the following tables is to identify the quantitative implica- tions of these objectives, i.e., the investment requirements, and balance of payrments , fiscal and credit implications of ar. acceleration of the annual growth rate of GDP to 6 percent, while at the sane time reducing the rate of increase of domestic prices to 9, 8, 7, and 6 percent during 1968, 1969, 1970, 1971 respectively, and 5 percent thereafter. As the footnotes to the individual tables indicate, available statistical infonna- tion is weak in certain areas. Fharthermore, the Governent1s future plans and programs have not yet been fully defined. Many of the estimates are accordingly only approximations. They are intended to illustrate the policy issues facing the Colombian Gorvernment rather than to be forecasts for the next five years. 2, The first step was to estimate gross fixed investment requirema-nts. Official historical series show a capital output ratio of 4.05. The projec- tions assume a decline in this ratio to an average for the peiod of 3.5, wThich is to be attained through a better utilization of existing capital and a more effective public investment program. On this basis, the pro- jected gross fixed investment requirements to sustaina o percent growth rate are Ps h6 billion for the 1968-73 period. Should the historical rela- tionship continue to prevail, the investment requirements would increase by sone Ps 7 billion. The investment requirements of the public sector were then estimated cn the basis of the historical relationship between total gross fixed investment and public investment, private investment being projected as the residual (Table 6). 3. The financing possibilities of the public sector were calculated by first projecting probable public savings after making allowance for the continuation of the program begun in 1967 to convert the income tax to a pay-as-you-go basis over a five-year period, the gradual elimination of the exchange subsidy for donestic purchases of petroleum and for a tax reform that would expand the tax base by 15 percent starting in 197C. On the expenditure side, allowance was made for continuation of the export subsidy, also started in 1967. The detailed assumptions underlying these projections are explained in the General Note to Table 2, Part III. h. The balance of payments projections were made to test the adequacy of eisting Government policies to support a 6 percent annual growth of GDP. Import requirements were projected by relating the prin- cipal categories of imports to GDP and investment on the basis of observed 1961-67 relationships. Due to the balance of payments diffic-ulties in past years, these relationships probably underestinate Colombia's import needs (Tables 6 and 7, Part ITI). Estimates prepared independently by the Planning Department shot, requirements higher by some US$50-100 million per year, Of special relevance here, as well as for the export promotion effort discussed in the folloTring paragraph, are the assumptions made zjith regard to excharnge  - 2 - rates. Early in 1967 the Colombian Government introduced a new exchange system under which the exchange rate to be applied to import and export transactions is to fluctuate in response to markcet forces, which on the demand side, eflect Government decisions on licensing of dmports and remittances. For purposes of calculation, the rate used for future years is the 1968 rate adjusted for estimated increases in domestic prices. The implied maintenance of present domestic and international price relaton- ships is not intended to suggest that the present exchange rate is an equilibrium rate. v. It is always difficult to project exports precisely in the face of norrmal ncertainty lwith regard to international market prices, crop fore- casts, elasticity cf suiply cf manufactures, etc. It is esnecitaly Eo in Zolonbia's present cirzunsutaTces. Experience under the new exchange system is stil) rather limited, as is the experience with the 15 percent export tax bonus and the operations of the Export Promotion Fund. The export projections contained in Table 2 are targets rather thian estimates, which reflect the Government's objectives for iminor exports and independent pro- jections for coffee, petroleum and non-registered exports. The Export Promotion Fund has prepared its omn itemized projectionis of minor exports (Table 4) in support of the Government's minor export targets. 6. Comnitnients of and disbursements from new official loans were projected on the basis of the Government's Project List for public and private sector loans. The part of this Project List corresponding to 1969 is fairly finn; the estimates about the tim.ing for completion and 'negotia- tion of the 1270-73 projects are more tentative. Commitments and disburse- ments for prcgram or sector loans were projected or the basis of w!hat is needed to corplete a viable external financing plar. consistent with growth objectives and the Governiment's intent to dispense with reliance on this type of assistance by 1973. 7. The monetary analysis rests on a projectior. of the financing capacity of the banking system (Table 1, Part IV) . Money supply iwas calculated on the basis of the projected monetary increase of GDP, assuming no change in its income velocity. Quasi-money was projected introducing the expected impact of the new savings schemes - constant valuae bonds and the National svings Fund. Changes in foreign assets were taken from the balance of payments projections.  PART I - NAT IONL ACCOUNTS Table of Contents Table No. 1. Population and GDP Average Annual Growth Rates, 19L451967 2. Expenditure on Gross Domestic Product at Current Market Prices, 1950-1973 3. Composition and Growth Rates of Expenditure on Gross Domestic Product, 195e-1973 4. Gross Domestic Product by Sectors of Origin, 1950-1967 5. Average Annrual Growth Rates and Composition of the Gross Domestic Product by Sector of Origin, 1950-1967 6. Estimate of Gross Fixed investnent 1950-1967 and Possible Requirements 1968-1973 7. Investuent and Its Financing, 1950-1973  PART I Table 1: PC>ULATION AND GDP AVERAGE ANNUAL GRCY.TTH RATES, 1945-1967 (Cumulative Annual Growrth Rate - Percentage) 1945-50 1950-54 1954-58 1958-62 1962-67 19L7-67 Population 2.6 2.6 2.8 3.0 3.2 3.0 Gross Domestic Product 6.o 5.6 3.2 5.3 4.4 5.0 GDP per Capita 3.3 2.9 0.4 2.2 1.1 1.9 Source: Banco de la Rep6blica  PART I Table 2: EXPFNDITURE ON GROSS DIMESTIC PRODUCT A CURRENT MARKET PFRICES, 1950-1973 (Millions of Pesos) Gross Gross Exports of Imports of Domestic Con- Invest- Goods and Goods and Product surnption ment Services oervices 1950 7,860.5 6,477.9 1,324.7 853.3 795.4 1951 8,9410.9 7,477.2 1,360.3 1,242.3 1,133.9 1952 9,650.9 3,063.8 1,492.6 1,286.5 1,192.0 1953 10,734.7 3,983.1 1,640.1 1,677.2 1,565.7 1954 12,758.8 10,567.8 2,142.0 1,907.5 1,358.5 1955 13,249.8 11,123.0 2,381.1 1,643.2 1,897.5 1956 14,862.8 12,191.7 2,704.6 1,846.0 1,879.5 1957 17,310.6 14,009.5 3,533.0 2,702.6 2,434.5 1958 20,682.5 16,201.0 3,362.6 3,889.9 3,271.0 1959 23,1472.1 1,391.0 4,395.6 4,069.8 3,384.3 3.960 26,417.6 20,937.7 5,476.6 4,163.9 4,160.6 1961 30,o67.0 24,236.6 6,294.9 3,920.2 4,434.7 1962 33,573.4 27,446.2 6,323.4 4,146.6 4,07.8 1963 42,707.3 35,222.0 7,978.1 5,173.5 5,666.3 1964 52,699.7 43,757.8 9,734.5 6,376.5 7,169.4 1965 58,837.2 47,631.3 10,586.4 6,943.5 6,324.5 1966 72,020.7 59,426.8 14,867.8 8,435.9 10,j709.8 1967 (Est.) 30,300.0 60,897.1 12,691.0 10,125.3 9,413.4 1963 (Est.) 92,746.5 76,315,b 16,920.0 1172)6.1 12,215l. 1969 206,194 71/ 8 ,036.62V 20 084 .0/ 13.7 41.2V u 15o.4001 h 1970 120,424o] 99,l63.5 Y 23,566.0' 1