February 27, 2021

Venezuelan immigration stimulates Colombia’s economy, according to the IMF



The International Monetary Fund (IMF) today praised the “commendable efforts of Colombia to integrate Venezuelan immigrants” who, he said, are stimulating local economic activity without evidence of local labor displacement.

“With the arrival of more than 2 million people in recent years, Colombian society has demonstrated exemplary commitment and support with vulnerable” Venezuelan immigrants, which has stimulated the growth of the economy “by approximately 0.25 percent last year, “the IMF said Friday in a statement at the end of the annual review of the Colombian economy.

Although it recognizes that Venezuelan immigration has also caused annual fiscal costs of “around 0.25 percent of GDP in the short term,” the agency says that these costs are expected to decrease “as immigrants integrate into the economy. “

For the latter, the Fund recalled, immigrants are assisted by the recent expansion of special work and residence permit programs in the country.

The flow of migrants, moreover, “has been largely absorbed by the informal sector, showing so far little evidence of labor displacement,” says the report on the effects on the local labor market, which the IMF considered continued weak in 2019 ..

The international financial institution led by Kristalina Georgieva also anticipated that Venezuelan migration will continue to be “an engine of growth for Colombia, where the degree of potential earnings will depend on the speed with which migrants integrate into the formal economy.

The report, which forecasts a GDP growth of 3.4% for this year, slightly higher than 3.3 in 2019, said that it is expected that sustained immigration, remittances from abroad as well as accommodative monetary and credit conditions will continue ” holding domestic private demand, including growing investment. “

It is estimated that Venezuelans who have settled in Colombia, fleeing the political, economic and social crisis of their country, could reach one and a half million, becoming their first host country.

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