Colombia: Staff Report for the First Review Under the Extended Arrangement

Colombia's economic performance deteriorated markedly in the last half of 1998 and during 1999 under the combined influence of external shocks and a weakening of confidence. In an effort to reverse the deterioration, the authorities developed a multiyear stabilization and reform program based on fiscal consolidation, exchange rate flexibility bank restructuring, and structural reforms. Indications suggested that economic activity in Colombia has been recovering and the IMF-supported extended program remains on track. The IMF staff welcomed the authorities' reaffirmation of the strategies and policies underlying the program.