Inflation that does not stop rising and interest rates that go hand in hand are some of the great concerns of Jaime Jaramillo, co-director of the Bank of the Republic on the construction sector, who highlighted, within the framework of the Camacol Economic Perspectives meeting, that unbridled consumption, with a devaluation of the Colombian peso and increases in the costs of inputs will be a formula to see a slowdown in the construction sector this new year.
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«The macroeconomic panorama shows that we had quite high growth in 2021 and 2022, the bad thing is that these good data are not sustainable, some sectors did better at the party than others», said.
On this, Jaramillo highlighted the performance of the builder, who did not even stop before the impact of the covid-19. «They did very well. We know the enormous contribution to the economy of the construction sector despite the turbulent economy, it is always one of the economic engines of the country»remarked.
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However, in the last two years interest rates have begun to press record numbers, and now the rates are the highest recorded in 20 years. Jaramillo is concerned about this dynamic in the sector, however he acknowledged that in five years there will be much lower rates that allow more access to credit, especially housing, due to the increase in debt capacity. For this through these climbs, the The issuer set the goal of lowering inflation in the following years and setting it between 1% and 3%.
«When one uses too much credit, the credit service and the interests eat it up,» he acknowledged. And it is that at the country level, the situation is not very different: «things have to add up, savings plus debt is equal to savings in the private and public sectors. Now we see a lack of savings, very typical of Colombia. After the 2000s We have a fairly large debt, which means that a large part of the government’s resources go to interest, that is not sustainable, we must find a way to pay the debt»manifested.
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‘Prospect 2023, not very good’
In the construction sector, the Issuer’s co-director explained that this year the outlook is challenging. «Before there was an excess of inventory, real housing prices have fallen, costs have reflected housing ‘shocks’. The dynamics are less but financial institutions continue to disburse for the housing sector,» given.
However, Jaramillo perceived a slowdown in the demand for housing, due to the economic situation that aggravates household finances.
«The financial burden of households has reached (consumption) and their demand for credit has decreased, to this is added the fact that they do not have as much ability to pay. Thus, people do not have the same interest in buying a home as before » said.
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In addition, he expressed his concern for the excessive consumption of households that has lowered their financial capacitybecause in the future, you will not be able to access a mortgage loan.
«People who have card over-indebtedness will not be able to access a home loan, and it is a concern»said.
PAULA ANDREA GALEANO ABALAGUERA
Portfolio Journalist