BOGOTA, May 28 (Reuters) - Colombian President Juan Manuel Santos unveiled a package of measures on Thursday aimed at stoking the Andean nation’s economy as weaker oil prices and slower investment forced the government to revise down its growth outlook.
The so-called PIPE 2.0 program to boost productivity and employment comes after a similar stimulus effort in April 2013 helped the economy accelerate 4.6 percent in 2014 before a plunge in the price of global crude, Colombia’s top export, led Santos to trim his growth forecast to 3.5 percent this year from 4.2 percent previously.
“Growth projections have been falling,” Santos said during the presentation in Bogota. “It’s exactly with that perspective, and still waving the banner of high growth in the region, we’ve decided it’s opportune to make an effort to boost the economy.”
He did not say how much the plan would lift economic expansion but said average growth through 2018 would be 4.3 percent.
“It’s an anti-cyclical effort...to see if we can grow at higher rates than what people think we’ll grow,” he said.
The new PIPE plan seeks to accelerate construction of housing and roads while also bolstering the education sector, using money from the oil and mining industry.
It also will extend for two years zero percent tariffs for some industrial imports like iron for steel production.
Santos said the plan will help create as many as 2 million new jobs by 2018.
“We are facing a bit more turbulence because of the price of oil, because of difficulties the global economy is having, and because of that it is necessary to strengthen our economy again,” Finance Minister Mauricio Cardenas said, speaking after Santos.
Much of the presentation referred to already-known economic measures and targets approved this month by Congress.
While the first PIPE plan poured 5 trillion pesos ($1.96 billion) into sectors like industry and construction as well as cutting taxes and tariffs, the new stimulus does not include additional funds.
“It is a plan that is framed by that principle...of fiscal responsibility, we are not going to disorder, we’re not going to put a happy face on it, everything within what we can do under our fiscal rule,” said Cardenas.
The government in February announced it was deferring 6 trillion pesos of non-essential spending that had been budgeted for, to compensate for the fast fall in income from oil.
$1 = 2,534.5 Colombian pesos Reporting by Bogota newsroom; Editing by Leslie Adler