Now It's Columbia's Turn

I wouldn't profess to be any kind of expert on the Columbian economy, nor even to know a great deal about it, but I couldn't help noticing this news in Bloomberg today:

Colombia sold $500 million of dollar- denominated bonds due in 2024, the fifth Latin American government this month to take advantage of tumbling debt yields to borrow overseas.

The government sold the 8.125 percent bond due May 2024 at 95.154 cents on the dollar to yield 3.69 percentage points over comparable U.S. Treasuries. The sale was co-managed by Citigroup Inc. and Merrill Lynch & Co.

Colombia's sale comes after $3.75 billion of bond sales since January 1 by Brazil, Venezuela, Mexico and Costa Rica, among other developing countries. The yield on Colombia's bond due in 2020 dropped to 8.45 percent before the sale from about 10.85 percent a year ago, according to J.P. Morgan Chase & Co., as demand rose for emerging-market debt with U.S. interest rates near four-decade lows.

This news comes on the back of an IMF favourable review of the satndby arrangement on Monday, in which context Anne Kreuger says the following:

"Economic policies for 2004 aim to support a further pick up in economic growth and a continued decline in inflation. The government and congress have put in place revenue and expenditure measures designed to lower the overall public sector deficit to two and one half percent of GDP in 2004. Moreover, the authorities intend to announce a further strengthening of the primary surplus for 2005, with a view to achieving a significant reduction in public debt as a share of GDP by 2010. Monetary policy will continue to be conducted in the context of the inflation targeting framework, together with a flexible exchange rate.

"Colombia's economic reform program and the government's firm intention to maintain the pace of structural reform have helped reduce the risks to the economic outlook. Firm implementation of the program will, nevertheless, remain necessary to lay the basis for sustained growth and improved equity. In particular, the adoption of the revised budget code, the rationalization of Colombia's system of fiscal decentralization and further strengthening of the pension system will be critical to moderate the growth of public expenditure and preserve fiscal sustainability. In addition, steps to broaden the revenue base and simplify many of the existing taxes would contribute to achieving a durable strengthening of public revenues."