Academic literature on the topic 'High-risk equipment'

This paper, primarily based on a literature review, considers the utilization of adult learning principles in training learners to operate high risk equipment. Vocational Education and Training sectors throughout the world are traditionally responsible for training delivery in these areas where generally andragogical principles as defined by Knowles (1970), are applied with, in some cases, application of a heutagogical approach, as outlined by Hase and Kenyon (2000). Aside from considering these approaches, a new approach is proposed, referred to as authology, with a basis of including notions of responsibility and duty of care in adult learning. There are numerous training programs in vocational education and training, such as those related to high risk equipment and plant operation, for which development of learner responsibility is a critical component in the training given the potential to cause harm, injury or fatality.

COVID-19 affecting the outcome of pregnancy is still under investigation. Here we report a case of primigravida with monochorionic diamniotic twin pregnancy with superimposed preeclampsia who develop symptoms of COVID-19 infection on her near term pregnancy and was confirmed later on as COVID-19 positive after cesarean section. The pregnancy was terminated abdominally due to the intrauterine fetal demise of both twins using COVID-19 standard equipment.

BACKGROUND: Recently, oil and gas industries have focused on risk-based methods to specifically compile inspection, maintenance, and management strategies worldwide. AIM: The provided method in this study is a management tool to recognize and then prioritize the equipment’s risks and, consequently, propose an inspection plan based on these risks. In fact, it is a risk analysis aspect of an inspection plan for industrial equipment. MATERIALS AND METHODS: The study is performed on de-ethanizer unit, considering variety of process equipment including distillation tower, exchanger, pressure vessel, drum, and related piping. To initiate the study, first, the risk-based inspection (RBI) team formed, then all required data were gathered and 22 equipment were identified based on the method. RESULTS: After RBI be performed and risks are estimated, 13.6% of equipment rated on high risk, 63.63% rated on medium risk, and 22.72% rated on low-risk classification. Based on specific risk criteria for equipment, we determined new parameters as inspection level and type of inspection and finally integrated them. As one of the obtained results, the overhaul maintenance of the unit was postponed to a later time and for equipment that should inspect before this year, reduction risk strategy and advance none distractive test defined, and their inspection time also postpone to 2015 from 2012 to 2013. CONCLUSION: This decision results in saving a shutdown cost, inspection cost, reduction of failure, and increasing of equipment reliability factor. The result of this study will be helpful to assist similar industries improving their risk management plans.

The correct selection and utilization of respiratory personal protective equipment is of the utmost importance in the current COVID-19 pandemic. This is especially true for health care workers exposed to high-risk aerosol-generating procedures, including otolaryngologists, ophthalmologists, neurosurgeons, maxillofacial surgeons, and laparoscopic surgeons. This communication provides a review of approved forms of respiratory protection and compares their characteristics, including surgical masks, N95 respirator, elastomeric respirators, powered air-purifying respirators, and controlled air-purifying respirators. For standard airborne precautions, N95 respirator are appropriate for respiratory protection. However, high-risk aerosol-generating procedures may create aerosolization of high viral loads that represent increased risk to health care workers. In these situations, enhanced respiratory protection with filters certified as 99, 100, or HEPA (high-efficiency particulate air) may be appropriate.

Heavy equipment trading industry is an industry that has a high level of risk. The heavy equipment trading industry is influenced by several factors that determine the condition of the mining industry, the condition of the property industry, the forestry industry and the price of the world's coal commodities. Segmentation to heavy equipment unit is very focused on the company because the heavy equipment unit has a high risk. When viewed from the impact of the impact of the industry is highly a requirement of risk. In accepting and managing these risks, it is necessary to apply risk management with the objective to minimize the risk of loss to the company.

Occupational risk assessment was carried out for the employees of 956 different professions of 20 enterprises under study in five sectors of the economy: construction, mining, manufacturing, agriculture, transportation, and warehousing. The study was conducted using the Methodological Recommendation on the implementation of the occupational risk management system at an enterprise. This Methodological Recommendation was developed by the Republican state enterprise on the right of economic management — Republican Scientific Research Institute for Labour Protection of Ministry of Labour and Social Protection of Population of the Republic of Kazakhstan. Occupational risks were assessed in the context of specific professions and structural divisions of the enterprises by five indicators: harmful working conditions, injury risk of the labor process, safety of production equipment, availability of personal protective equipment, and risk of morbidity. Based on the results of the assessment, the degree of individual occupational risk on each assessed indicator is determined by five gradations: I — acceptable risk, II — low, III — medium, IV — high and V — very high. According to the results of the occupational risk assessment, a high risk (4 degree) was established at the enterprises of mining, construction, agricultural industries, as well as transport, and warehousing industries. According to the results of equipment safety assessment, a high risk (grade IV) was identified at the enterprises of transport and mining industries. Due to the low provision with the personal protective equipment and its non-compliance with the certification requirements, a high risk is assigned to the enterprises of mining and construction industries. It is established that a high degree of occupational risk is due to the injury risk of working conditions, insufficient provision of personal protective equipment along with their low quality, the severity and intensity of the labor process accompanied by a high degree of the employees morbidity, as well as the use of the outdated equipment in production.

The theoretical questions of application thrower soil for fighting forest fires with the pres-entation of its practical use in high fire risk. To evaluate the effectiveness of the new technique in the article studied the use of existing information base technology in the modern world. Indices assess the efficiency of the new equipment and held their complex analysis.

Purposes: To provide descriptive information about the sound levels to which high-risk infants are exposed in various actual environmental conditions in the NICU, including the impact of physical renovation on sound levels, and to assess the contributions of various types of equipment, alarms, and activities to sound levels in simulated conditions in the NICU.Design: Descriptive and comparative design.Sample: Convenience sample of 134 infants at a southeastern quarternary children’s hospital.Main Outcome Variable: A-weighted decibel (dBA) sound levels under various actual and simulated environmental conditions.Results: The renovated NICU was, on average, 4–6 dBA quieter across all environmental conditions than a comparable nonrenovated room, representing a significant sound level reduction. Sound levels remained above consensus recommendations despite physical redesign and staff training. Respiratory therapy equipment, alarms, staff talking, and infant fussiness contributed to higher sound levels.Conclusion: Evidence-based sound-reducing strategies are proposed. Findings were used to plan environment management as part of a developmental, family-centered care, performance improvement program and in new NICU planning.

Проведено аналіз запропонованих Мінсоцполітики змін до нормативно-правових актів, що регулюють діяльність у сфері охорони праці та промислової безпеки. Показано, що прийняття запропонованих змін до вказаних документів сприятиме зростанню ризиків при експлуатації зношеного виробничого обладнання, рівня виробничого травматизму та аварій виробничого характеру під час експлуатації устаткування підвищеної небезпеки, що відпрацювало граничний строк експлуатації.
The analysis of the changes proposed by the Ministry of Social Policy in the regulatory legal acts regulating the activities in the field of labor protection and industrial safety was carried out. It is shown that acceptance of proposed changes to the indicated documents will increase the risk of exploitation of worn-out industrial equipment, the level of occupational injuries and industrial accidents during the operation of high-risk equipment, which has expired the limitation period of exploitation.

碩士
國立臺灣科技大學
工業管理系
105
An oil refinery had a turnaround in 2016, because in addition to routine maintenance, but also must be replaced by a special giant key equipment, making the scale and complexity of work were the highest than before, but the factory overhaul work must still be controlled within 72 days to complete, in order to be able to resume production of oil refining to meet the domestic consumption of oil demand. The special equipment of the petrochemical industry is generally designed and manufactured by foreign manufacturers then constructed and installed in collaboration with experienced global companies. However, the process of contacting the original manufacturer for helping with factory overhaul was not smooth. Thus, the refinery was trapped in a dilemma either to continue contacting the original manufacturer but may delay the scheduled overhaul plan, resulting in longer than expected downtime; or on the other hand, the refinery may find domestic manufacturers to perform installation according to the original design. Then obtaining the original patent license from the original manufacturer must proceed before seeking domestic manufacturer with technical competence to avoid technical infringement and other legal issues which may result in possible loss of corporate property and international reputation. The use of scenario planning and decision tree analysis can lead to a reasonable decision outcome of seeking domestic manufacturer. In the past, the factory had never accomplished similar special equipment renewal project, and no domestic contractor had any experience in this overhaul project. Without appropriate technical and management capacity, accidents could happen and result in personnel or equipment damage, or the equipment may not be repaired completely and caused serious delays, public security, environmental crisis, or possible huge loss of property. The use of hierarchical task analysis which illustrated necessary steps to perform overhaul projects followed by failure mode and impact analysis to illustrate function, potential failure mode, severity and possible causes associated with each perform step can reduce the risk in performing the overhaul task. Finally, the overhaul decision making and execution process was examined by the systems thinking approach to help the refinery develop best practice for the future refinery operations as part of continuous improvement to organizational learning.

碩士
國立交通大學
工學院碩士在職專班產業安全與防災組
96
In recent years domestic wafer type Solar cell fabs have been rapidly increasing in large numbers. Although the varieties of equipment, special gases and chemicals used for wafer type Solar cell fabrication is much less comparing with that of the with other semiconductor industry, the volume consumption of gases and chemicals is much larger. Consequently the risk is much higher. Partially due to rapid capacity expansion without established industry-wide safety evaluation mechanism, in November 23, 2005, a very serious fatal accident resulted from gas explosion occurred at Motech. This unfortunate event has raised the awareness of the urgency and importance of establishing risk mitigation practice for high volume mass production wafer type Solar cell fabs with capacity greater than 1000pcs/hr. The lesson learned from Motech accident is that risk mitigation practice of wafer type Solar cell fab needs to be reevaluated and improved. From the accident history of semiconductor manufacturing industry, the key point of operation safety is to base on manufacturing processes and the characteristic of gases/chemicals being used in the fab, systematically identify major latent risk factors and consequences. Then utilizing tools to simulate how the accident happened to formulate corrective actions and establish risk mitigation practice and emergency response plans to minimize the risk and scale of the accidents. Even though the solar cell industry is prosperous, the overall economy is depressed. More accidents might result in significant negative impact and losing up mobile momentum of the industry. Hence effective risk assessment and the establishment of comprehensive check list are critical. This paper utilizes hazardous risk assessment and supplement with systematic evaluation method to identify high risk production equipment in high volume mass production wafer type solar cell fab. When accompanied with case study of know accident in the industry, Plasma Enhanced Chemical Vapor Deposition (PECVD) tool has been identified as highly risky due to its use of silane. A comprehensive assessment and risk mitigation practice with a check list have been established with the concurrence of operation units.

碩士
國立中央大學
環境工程研究所在職專班
106
In the semiconductor packaging and testing industry, many raw materials (such as flammable chemicals, strong acids, strong alkalis, strong oxidizing substances and flammable gases) are used in various processes equipment operated at high temperatures according to the process requirements. While the products are regulated by the relevant laws and regulations, these laws and regulations are not as clear and specific as the standards that can be followed in foreign countries, resulting in that enterprises can only rely on the experience to set up their equipment procurement specifications. In this case, it is easy to derive the fire caused by poor equipment safety design and improper on-site management. In addition, the design of the plant is mostly in a closed environment, which leads to the difficulty of people evacuation and disaster relief when the fire occurs. In this study, the Failure Mode and Effect Analysis (FMEA) and EMI S10 risk assessment method are used to analyze the hazards that can be caused in the process of equipment with high-temperature operation (i.e., High Temperature Equipment) by the functional failure of apparatus components, exhaust system and the safety interlock devices, and study the improvement countermeasures according to the risk assessment results. Using a semiconductor packaging and testing industry as a case, the failure analysis of the fire project caused by the process of High Temperature Equipment reveals that (i) among the Equipment Components, the highest risk priority number is when the element material is carbonated (RPN was 320); (ii) in the Exhaust System, when the pipeline full of internal condensation, the highest risk priority number is scored 392; (iii) among the Safety interlock System, the highest risk priority number of the safety interlock devices and the temperature detection devices are scored 336. According to the analysis of various failure items, it was found that the reason of the high risk priority, apart from causality, the general problems are lack of existing prevention and detection deficiencies, which leads to the failure to prevent the occurrence. This study also takes how to early prevention of failures as an improvement strategy to compare the differences between before and after improvement that is made. It is found that the abnormity of the equipment components is carbonated by the element material, the RPN scored is reduced to 128; the RPN scored of the safety interlock system is reduced to 96, and the RPN scored of the temperature detection system is reduced to 144; in exhaust pipe, the abnormal internal condensation in the pipeline which RPN scored fell from 392 to 112. From the outcome of the improvement, it is known that the Standards should be set up early in the stage of equipment planning and evaluation to reduce the failure rate of process equipment during operation. According to the above results, the risk value of internal condensation of exhaust pipeline is the highest, resulting in condensation phenomenon caused when a high temperature gas contacting with cold surfaces. The second high risk value is the safety interlock system, because the equipment machine is not connected with the safety interlock devices. The element material carbonation ranks the third place, because the component temperature exceeds the circuit insulation temperature. Hence. the above projects in the management control should be strengthened via personnel routine testing, cleaning frequency and regular infrared thermal imaging instrument to measure temperature; further, in engineering control, a condensation collecting plate and the exhaust flow detector can be set up inside the exhaust pipe and safety interlock system should controlled by double and double loop protection devices; lastly, the material carbonation of the circuit material should be replaced with a heat-resistant material.

AbstractThe wide range of medical disciplines afferent to anesthesiology (anesthesia, perioperative care, intensive care medicine, pain therapy, and emergency medicine), carry a great, cross-specialty opportunity to influence safety and quality of patients’ care. Operating rooms and Intensive Care Units are settings burdened with a high risk of error: surgery is evolving, while the medical staff working in ICU is expected to provide high-quality care in a stressful and complex setting. It is estimated that about 1.5% of surgical interventions are complicated by critical events, but the true incidence is likely underestimated. Across medical specialties, preventable patient harm is more prevalent in the ICU.Recommendations and good practices for the safe provision of anesthesia and critical care exist and must be known and transferred into daily practice, since one of the main duties of anesthesia and critical care providers is to provide patient safety. Strategies to reduce the occurrence of medication errors, appropriate monitoring practices, equipment care and knowledge, planification and mastery of non-technical skills during emergencies, as well as designing and sustaining a healthy work environment and adopting adequate staffing policies could have an impact on patient safety and positively influence patient outcomes in this setting. The development of simulation training and cognitive aids (e.g., checklists, emergency manuals) is also changing the approach to crises and is expected to encourage a deeper cultural change.

This chapter provides the reader with logical guidelines and checklists to investigate and quickly correct problems with anaesthetic equipment. The anaesthetist is dependent on the smooth and correct functioning of the necessary equipment, and this chapter explains some of the issues that may be encountered. The areas covered are: leaks in the anaesthetic breathing circuit, ventilator failure, oxygen supply failure, theatre power failure, and causes of high airway pressure. Each problem is addressed by firstly its definitions, presentation, investigations, risk factors, and exclusions; then how it can be managed in the immediate, medium-, and long-term situations. Finally, any special considerations are outlaid, followed by a list of further reading.

The chapter covers practical risk managers' points during the planning stage of entrepreneurship to integrate into decision making and core business processes. The chapter includes three risks and how to improve the integration of risk management into organizational culture grouped into three high-level objectives. First, strategic risks include the study of competitors, macroeconomics with its industry changes. Second, financial risks such as the business return of investment and forecasting, customer payments, loan interest charges, and liquidity. Access to finance featured prominently in several studies as a constraint on SME development. The third is the operational risks and internal analysis that includes legal compliance, breakdown of essential equipment, employee mismatch, partnership, information technology, external events, and supply chain reliability. It is vital to establish an organizational culture where risk management is a daily component activity.

This chapter examines safety related to high and higher speed inter-city passenger rail operations. Generally, most risk related to rail travel is associated with collisions between on-track equipment and vehicles and pedestrians at level crossings. A larger amount of fatalities, but not necessarily systemic risk, is due to trespassing on the rail right-of-way. A third aspect of risk related to rail operations lies in rail to rail collisions and derailments, some of which may be catastrophic. A discussion of safety programs implemented by the rail industry at national and international levels concludes the chapter.

There is increasing emphasis on improving the effectiveness of all physical assets, particularly major assets such as rotating equipment where the financial and business consequences of failure are significant. A number of approaches to asset (or maintenance) management have been proposed and attempted with varying degrees of success. Maintenance philosophies such as Total Productive Maintenance, Condition-Based Maintenance and Reliability Centered Maintenance are being heavily promoted by users and consultants alike. However, a consistent and comprehensive solution to business needs has not always resulted and implementation of these new techniques has often been only partially successful. This lack of success is often caused by the absence of a comprehensive approach to asset management that considers all aspects of the equipment life cycle. It is now beginning to be recognized that a risk-based approach offers a unique opportunity for providing an integrated perspective on the management of physical assets. Risk-based methods not only offer a powerful method for assisting in decision-making that can span from high level to lower level decisions but also provides specific tools that can be brought to bear on design, operational and maintenance needs. These methods fully support a life cycle view of assets that optimizes their effectiveness in the context of overall business goals and objectives. This paper describes the application of risk-based management and associated techniques to the life cycle of major rotating equipment in pipeline operation. A comprehensive framework consistent with best practices and international standards is established providing the basis for design, construction, operation and maintenance phases of the life cycle. Of key importance is the presentation of a decision-making process based on integrated risk that brings major value to operators of physical assets. Relevant risk-based techniques are described and evaluated for applicability to rotating equipment.

High pressure hydrogenation cracking unit is the core equipment system in the aromatic plant, which is subjected simultaneously to the action of hydrogen and high pressure and high temperature. In this paper, quantitative analysis method of RBI was carried out by Orbit-Onshore software, which was developed by DNV corporation. In API 581, the risk situation for a certain equipment unit were classified into four grades, such as low risk grade and medium risk grade and medium-high risk grade and high grade, which is expressed as risk matrix. The whole risk distribution of 553 equipment and piping items was obtained, and in which the hydrocracking reactors and the reactor effluent air coolers are belong to ‘medium-high risk’ grade. Based on the RBI results, an optimum inspection plan was developed by the author to reduce the risk level for the hydrogenation cracking unit. It is concluded that the optimum inspection plan was completely satisfied with the engineering specification of the aromatic plant, after the validation of the inspection activity in 2004.

Risk-based inspection (RBI) methodologies are widely used by industry to develop effective inspection programs for pressure vessels and piping. The RBI approach use data on equipment design, maintenance, and operation along with inspection history to evaluate both the likelihood and consequences of failure. RBI results provide a basis for selecting inspection methods and establishing inspection intervals and coverage. API RP 580 provides guidance on developing a RBI program for fixed equipment and piping, while API RP 581 provides quantitative procedures for establishing RBI methodology. Appendix J of the first edition (2000) of API RP 581 contained procedures for application to creep damage of furnace tubes. However, the second (2008) and third (2016) did not contain any procedures for application to creep damage of equipment, including furnace tubes. DNV GL undertook a RBI project for a coal-fired power plant in Malaysia that required evaluation of components subject to creep damage. As part of this project, a detailed likelihood of failure (LoF) model for creep was developed. This paper reviews the creep LoF model that was developed and discusses a case study of its application. The LoF is estimated using a limit state function where the resistance is characterized using Larson-Miller parameter creep-rupture expressions for the materials of interest and the load is characterized by the time in service. A mean value first order second moment (MVFOSM) method is employed to numerically compute LoF. Guidelines for including metallurgical replication results in the LoF estimate and for assigning inspection effectiveness for creep damage also are discussed.

Floods are major water-related disasters that affect millions of people resulting in thousands of mortalities and billiondollar losses globally every year. Flood Early Warning Systems (FEWS) - one of the floods risk management measures - are currently operational in many countries. The UN Office for Disaster Risk Reduction recognises their importance and strongly advocates for an increase in their availability under the targets of the Sendai Framework for Disaster Risk Reduction, and Sustainable Development Goals (SDGs). However, despite widespread recognition of the importance of FEWS for disaster risk reduction (DRR), there’s a lack of information on their availability and status around the world, their benefits and costs, challenges and trends associated with their development. This report contributes to bridging these gaps by analyzing the responses to a comprehensive online survey with over 80 questions on various components of FEWS (risk knowledge, monitoring and forecasting, warning dissemination and communication, and response capabilities), investments into FEWS, their operational effectiveness, benefits, and challenges. FEWS were classified as technologically “basic”, “intermediate” and “advanced” depending on the existence and sophistication of FEWS` components such as hydrological data = collection systems, data transfer systems, flood forecasting methods, and early warning communication methods. The survey questionnaire was distributed to flood forecasting and warning centers around the globe; the primary focus was developing and least-developed countries (LDCs). The questionnaire is available here: https://inweh.unu.edu/questionnaireevaluation-of-flood-early-warning-systems/ and can be useful in its own right for similar studies at national or regional scales, in its current form or with case-specific modifications. Survey responses were received from 47 developing (including LDCs) and six developed countries. Additional information for some countries was extracted from available literature. Analysis of these data suggests the existence of an equal number of “intermediate” and “advanced” FEWS in surveyed river basins. While developing countries overall appear to progress well in FEWS implementation, LDCs are still lagging behind since most of them have “basic” FEWS. The difference between types of operational systems in developing and developed countries appear to be insignificant; presence of basic, intermediate or advanced FEWS depends on available investments for system developments and continuous financing for their operations, and there is evidence of more financial support — on the order of USD 100 million — to FEWS in developing countries thanks to international aid. However, training the staff and maintaining the FEWS for long-term operations are challenging. About 75% of responses indicate that river basins have inadequate hydrological network coverage and back-up equipment. Almost half of the responders indicated that their models are not advanced and accurate enough to produce reliable forecasts. Lack of technical expertise and limited skilled manpower to perform forecasts was cited by 50% of respondents. The primary reason for establishing FEWS, based on the survey, is to avoid property damage; minimizing causalities and agricultural losses appear to be secondary reasons. The range of the community benefited by FEWS varies, but 55% of FEWS operate in the range between 100,000 to 1 million of population. The number of flood disasters and their causalities has declined since the year 2000, while 50% of currently operating FEWS were established over the same period. This decline may be attributed to the combined DRR efforts, of which FEWS are an integral part. In lower-middle-income and low-income countries, economic losses due to flood disasters may be smaller in absolute terms, but they represent a higher percentage of such countries’ GDP. In high-income countries, higher flood-related losses accounted for a small percentage of their GDP. To improve global knowledge on FEWS status and implementation in the context of Sendai Framework and SDGs, the report’s recommendations include: i) coordinate global investments in FEWS development and standardise investment reporting; ii) establish an international hub to monitor the status of FEWS in collaboration with the national responsible agencies. This will support the sharing of FEWS-related information for accelerated global progress in DRR; iii) develop a comprehensive, index-based ranking system for FEWS according to their effectiveness in flood disaster mitigation. This will provide clear standards and a roadmap for improving FEWS’ effectiveness, and iv) improve coordination between institutions responsible for flood forecasting and those responsible for communicating warnings and community preparedness and awareness.

The prevalence of substandard medicines in Africa is high but not well documented. Low and Middle-Income Countries (LMICs) are likely to face considerable challenges with substandard medications. Africa faces inadequate drug regulatory practices, and in general, compliance with Good Manufacturing Practices (GMP) in most of the pharmaceutical industries is lacking. The majority of pharmaceutical manufacturers in developing countries are often overwhelmed by the GMP requirements and therefore are unable to operate in line with internationally acceptable standards. Non-conformances observed during regulatory inspections provide the status of the compliance to GMP requirements. The study aimed to identify the GMP non-conformances during regulatory inspections and gaps in the production of pharmaceuticals locally manufactured in Uganda by review of the available 50 GMP reports of 21 local pharmaceutical companies in Uganda from 2016. The binary logistic generalized estimating equations (GEE) model was applied to estimate the association between odds of a company failing to comply with the GMP requirements and non-conformances under each GMP inspection parameter. Analysis using dummy estimation to linear regression included determination of the relationship that existed between the selected variables (GMP inspection parameters) and the production capacity of the local pharmaceutical industry. Oral liquids, external liquid preparations, powders, creams, and ointments were the main categories of products manufactured locally. The results indicated that 86% of the non-conformances were major, 11% were minor, and 3% critical. The majority of the non-conformances were related to production (30.1%), documentation (24.5%), and quality control (17.6%). Regression results indicated that for every non-conformance under premises, equipment, and utilities, there was a 7-fold likelihood of the manufacturer failing to comply with the GMP standards (aOR=6.81, P=0.001). The results showed that major non-conformances were significantly higher in industries of small scale (B=6.77, P=0.02) and medium scale (B=8.40, P=0.04), as compared to those of large scale. This study highlights the failures in quality assurance systems and stagnated GMP improvements in these industries that need to be addressed by the manufacturers with support from the regulator. The addition of risk assessment to critical production and quality control operations and establishment of appropriate corrective and preventive actions as part of quality management systems are required to ensure that quality pharmaceuticals are manufactured locally.

Macroeconomic summary Several factors contributed to an increase in projected inflation on the forecast horizon, keeping it above the target rate. These included inflation in December that surpassed expectations (5.62%), indexation to higher inflation rates for various baskets in the consumer price index (CPI), a significant real increase in the legal minimum wage, persistent external and domestic inflationary supply shocks, and heightened exchange rate pressures. The CPI for foods was affected by the persistence of external and domestic supply shocks and was the most significant contributor to unexpectedly high inflation in the fourth quarter. Price adjustments for fuels and certain utilities can explain the acceleration in inflation for regulated items, which was more significant than anticipated. Prices in the CPI for goods excluding food and regulated items also rose more than expected. This was partly due to a smaller effect on prices from the national government’s VAT-free day than anticipated by the technical staff and more persistent external pressures, including via peso depreciation. By contrast, the CPI for services excluding food and regulated items accelerated less than expected, partly reflecting strong competition in the communications sector. This was the only major CPI basket for which prices increased below the target inflation rate. The technical staff revised its inflation forecast upward in response to certain external shocks (prices, costs, and depreciation) and domestic shocks (e.g., on meat products) that were stronger and more persistent than anticipated in the previous report. Observed inflation and a real increase in the legal minimum wage also exceeded expectations, which would boost inflation by affecting price indexation, labor costs, and inflation expectations. The technical staff now expects year-end headline inflation of 4.3% in 2022 and 3.4% in 2023; core inflation is projected to be 4.5% and 3.6%, respectively. These forecasts consider the lapse of certain price relief measures associated with the COVID-19 health emergency, which would contribute to temporarily keeping inflation above the target on the forecast horizon. It is important to note that these estimates continue to contain a significant degree of uncertainty, mainly related to the development of external and domestic supply shocks and their ultimate effects on prices. Other contributing factors include high price volatility and measurement uncertainty related to the extension of Colombia’s health emergency and tax relief measures (such as the VAT-free days) associated with the Social Investment Law (Ley de Inversión Social). The as-yet uncertain magnitude of the effects of a recent real increase in the legal minimum wage (that was high by historical standards) and high observed and expected inflation, are additional factors weighing on the overall uncertainty of the estimates in this report. The size of excess productive capacity remaining in the economy and the degree to which it is closing are also uncertain, as the evolution of the pandemic continues to represent a significant forecast risk. margin, could be less dynamic than expected. And the normalization of monetary policy in the United States could come more quickly than projected in this report, which could negatively affect international financing costs. Finally, there remains a significant degree of uncertainty related to the duration of supply chocks and the degree to which macroeconomic and political conditions could negatively affect the recovery in investment. The technical staff revised its GDP growth projection for 2022 from 4.7% to 4.3% (Graph 1.3). This revision accounts for the likelihood that a larger portion of the recent positive dynamic in private consumption would be transitory than previously expected. This estimate also contemplates less dynamic investment behavior than forecast in the previous report amid less favorable financial conditions and a highly uncertain investment environment. Third-quarter GDP growth (12.9%), which was similar to projections from the October report, and the fourth-quarter growth forecast (8.7%) reflect a positive consumption trend, which has been revised upward. This dynamic has been driven by both public and private spending. Investment growth, meanwhile, has been weaker than forecast. Available fourth-quarter data suggest that consumption spending for the period would have exceeded estimates from October, thanks to three consecutive months that included VAT-free days, a relatively low COVID-19 caseload, and mobility indicators similar to their pre-pandemic levels. By contrast, the most recently available figures on new housing developments and machinery and equipment imports suggest that investment, while continuing to rise, is growing at a slower rate than anticipated in the previous report. The trade deficit is expected to have widened, as imports would have grown at a high level and outpaced exports. Given the above, the technical staff now expects fourth-quarter economic growth of 8.7%, with overall growth for 2021 of 9.9%. Several factors should continue to contribute to output recovery in 2022, though some of these may be less significant than previously forecast. International financial conditions are expected to be less favorable, though external demand should continue to recover and terms of trade continue to increase amid higher projected oil prices. Lower unemployment rates and subsequent positive effects on household income, despite increased inflation, would also boost output recovery, as would progress in the national vaccination campaign. The technical staff expects that the conditions that have favored recent high levels of consumption would be, in large part, transitory. Consumption spending is expected to grow at a slower rate in 2022. Gross fixed capital formation (GFCF) would continue to recover, approaching its pre-pandemic level, though at a slower rate than anticipated in the previous report. This would be due to lower observed GFCF levels and the potential impact of political and fiscal uncertainty. Meanwhile, the policy interest rate would be less expansionary as the process of monetary policy normalization continues. Given the above, growth in 2022 is forecast to decelerate to 4.3% (previously 4.7%). In 2023, that figure (3.1%) is projected to converge to levels closer to the potential growth rate. In this case, excess productive capacity would be expected to tighten at a similar rate as projected in the previous report. The trade deficit would tighten more than previously projected on the forecast horizon, due to expectations of an improved export dynamic and moderation in imports. The growth forecast for 2022 considers a low basis of comparison from the first half of 2021. However, there remain significant downside risks to this forecast. The current projection does not, for example, account for any additional effects on economic activity resulting from further waves of COVID-19. High private consumption levels, which have already surpassed pre-pandemic levels by a large margin, could be less dynamic than expected. And the normalization of monetary policy in the United States could come more quickly than projected in this report, which could negatively affect international financing costs. Finally, there remains a significant degree of uncertainty related to the duration of supply chocks and the degree to which macroeconomic and political conditions could negatively affect the recovery in investment. External demand for Colombian goods and services should continue to recover amid significant global inflation pressures, high oil prices, and less favorable international financial conditions than those estimated in October. Economic activity among Colombia’s major trade partners recovered in 2021 amid countries reopening and ample international liquidity. However, that growth has been somewhat restricted by global supply chain disruptions and new outbreaks of COVID-19. The technical staff has revised its growth forecast for Colombia’s main trade partners from 6.3% to 6.9% for 2021, and from 3.4% to 3.3% for 2022; trade partner economies are expected to grow 2.6% in 2023. Colombia’s annual terms of trade increased in 2021, largely on higher oil, coffee, and coal prices. This improvement came despite increased prices for goods and services imports. The expected oil price trajectory has been revised upward, partly to supply restrictions and lagging investment in the sector that would offset reduced growth forecasts in some major economies. Elevated freight and raw materials costs and supply chain disruptions continue to affect global goods production, and have led to increases in global prices. Coupled with the recovery in global demand, this has put upward pressure on external inflation. Several emerging market economies have continued to normalize monetary policy in this context. Meanwhile, in the United States, the Federal Reserve has anticipated an end to its asset buying program. U.S. inflation in December (7.0%) was again surprisingly high and market average inflation forecasts for 2022 have increased. The Fed is expected to increase its policy rate during the first quarter of 2022, with quarterly increases anticipated over the rest of the year. For its part, Colombia’s sovereign risk premium has increased and is forecast to remain on a higher path, to levels above the 15-year-average, on the forecast horizon. This would be partly due to the effects of a less expansionary monetary policy in the United States and the accumulation of macroeconomic imbalances in Colombia. Given the above, international financial conditions are projected to be less favorable than anticipated in the October report. The increase in Colombia’s external financing costs could be more significant if upward pressures on inflation in the United States persist and monetary policy is normalized more quickly than contemplated in this report. As detailed in Section 2.3, uncertainty surrounding international financial conditions continues to be unusually high. Along with other considerations, recent concerns over the potential effects of new COVID-19 variants, the persistence of global supply chain disruptions, energy crises in certain countries, growing geopolitical tensions, and a more significant deceleration in China are all factors underlying this uncertainty. The changing macroeconomic environment toward greater inflation and unanchoring risks on inflation expectations imply a reduction in the space available for monetary policy stimulus. Recovery in domestic demand and a reduction in excess productive capacity have come in line with the technical staff’s expectations from the October report. Some upside risks to inflation have materialized, while medium-term inflation expectations have increased and are above the 3% target. Monetary policy remains expansionary. Significant global inflationary pressures and the unexpected increase in the CPI in December point to more persistent effects from recent supply shocks. Core inflation is trending upward, but remains below the 3% target. Headline and core inflation projections have increased on the forecast horizon and are above the target rate through the end of 2023. Meanwhile, the expected dynamism of domestic demand would be in line with low levels of excess productive capacity. An accumulation of macroeconomic imbalances in Colombia and the increased likelihood of a faster normalization of monetary policy in the United States would put upward pressure on sovereign risk perceptions in a more persistent manner, with implications for the exchange rate and the natural rate of interest. Persistent disruptions to international supply chains, a high real increase in the legal minimum wage, and the indexation of various baskets in the CPI to higher inflation rates could affect price expectations and push inflation above the target more persistently. These factors suggest that the space to maintain monetary stimulus has continued to diminish, though monetary policy remains expansionary. 1.2 Monetary policy decision Banco de la República’s board of directors (BDBR) in its meetings in December 2021 and January 2022 voted to continue normalizing monetary policy. The BDBR voted by a majority in these two meetings to increase the benchmark interest rate by 50 and 100 basis points, respectively, bringing the policy rate to 4.0%.