BOGOTA, May 12 (Reuters) - Colombian President Gustavo
Petro on Friday called on private banks to lower interest rates
on mortgages and the productive sectors, while saying that
higher import tariffs would be needed to protect the country's
industry and agriculture, as well as jobs.
Petro's announcement comes as indicators show Latin
America's fourth-largest economy is beginning to slow, amid the
country's highest interest rates and inflation in more than two
decades.
"Interest rate hikes put the country's entire productive
economy at risk. The government must mitigate that risk," Petro
said in a televised address, while calling on private banks to
cut their interest rates on loans for the productive sectors and
mortgages by as much as possible.
Colombia's central bank has hiked its benchmark interest
rate by a total of 1,150 basis points, to the current level of
13.25%.
The hikes are part of an upward monetary cycle to contain
inflation, which stood at 12.82% in the 12 months through April,
more than four times the bank's 3% target.
Petro, Colombia's first left-wing president, also floated an
increase in trade tariffs.
"Additionally, we must use higher tariffs to protect the
industrial and agricultural sectors and national labor," he
said.
The government's DANE statistics agency earlier reported
that Colombia's industrial output contracted 2% in March versus
the same month in 2022, its first drop since January 2021,
while retail sales fell 7.1%, reflecting the slowdown of the
economy.
A Reuters poll on Thursday showed that analysts expect
Colombia's economy to have expanded 2.8% year-on-year in the
first quarter of 2023, well below the 7.8% growth reported in
the year-earlier period.
(Reporting by Nelson Bocanegra
Writing by Oliver Griffin
Editing by Leslie Adler)
