The International Monetary Fund on Friday announced it had raised by $6.5 billion a credit line offered to Colombia to about $17.2 billion, aiming to help the country cope with the economic effects of Covid-19.
"The augmentation was approved in light of Colombia's continued qualification with very strong institutional policy frameworks, track record of economic performance and policy implementation, and against a backdrop of higher external risks and a larger than expected adverse impact from Covid-19 pandemic," the Washington-based crisis lender said in a statement.
Colombia has had a Flexible Credit Line (FCL) since May 2009, and the IMF board has renewed it every two years, providing the country with money that could be deployed to head off a crisis.
The latest renewal in May was for $10.8 billion, but deputy IMF managing director Antoinette Sayeh said in a statement that Colombia's downturn was deeper than expected and the country is set for its worst recession on record.
"The augmentation of access under the current FCL arrangement will help Colombia manage heightened external risks, protect ongoing efforts to effectively respond to the pandemic, continue to integrate migrants from Venezuela, foster inclusive growth and reduce external vulnerabilities," she said.
IMF mission chief for Colombia Hamid Faruqee said the country's economy is expected to shrink 8.2 percent this year, worse than the 2.5 percent drop originally forecast.
"We do expect growth to rebound," he said, predicting GDP increasing four percent next year.
Colombia is one of five countries that have received an FCL, along with Chile, Mexico, Peru and Poland, which exited the arrangement in late 2017.
None of the countries have drawn on the funds, the IMF said.