Academic literature on the topic 'National Minimun Wage'

We study the impact of minimum wages on firm profitability, exploiting the changes induced by the introduction of a UK national minimum wage in 1999. We use pre-policy information on the distribution of wages to implement a difference-in-differences approach. Minimum wages raise wages, but also significantly reduce profitability (especially in industries with relatively high market power). This is consistent with a simple model where wage gains from minimum wages map directly into profit reductions. There is some suggestive evidence of longer run adjustment to the minimum wage through falls in net entry rates. (JEL J31, J38, L25)

Motivation: The minimum wage protect employees from excessively low wages. It helps ensure fair participation in economic development for the general public. The minimum wage in the economy is an essential element in a country’s economic policy. Decisions concerning the implementation and changes in the minimum wage are part of the socio-economic policy of the state. Research on minimum wage relate to its overall impact on the level and structure of wages, employment, productivity at work, the size of the gray economy, the level of poverty and public finances. Factors affecting changes in the minimum wage are formal and non-formal. The question therefore arises which factors are decisive in the Polish economy. Aim: The aim of this paper is to present the essence and causes of changes in the minimum wage in Poland in 2003–2020 with particular regard to formal and non-formal aspects. Results: On the basis of research carried out in Poland, a link between minimum wage and inflation was observed. There is also a fundamental relationship between the minimum wage and average wages in the economy. It has been shown that the minimum wage is not without significance for the impact on public finance sector in Poland.

Purpose After 15 years of successful operation, the British Low Pay Commission’s management of the National Minimum Wage was threatened in 2015 by the government’s introduction the National Living Wage. The purpose of this paper is to consider the underlying principles of previous minimum wage fixing, and the additional thinking of the Living Wage Foundation and the review of the issue by the Resolution Foundation. Design/methodology/approach The paper draws on the 2016 reports of the Commission to argue that the two statutory wages are unavoidably interlinked and are tied to incompatible criteria. Findings The paper concludes that the predicted eventual impact of the National Living Wage on the labour market will be unsustainable. Research limitations/implications The paper is relevant to minimum wage research. Practical implications The paper is relevant to minimum wage policy. Social implications The paper is relevant to low pay policy. Originality/value The paper provides original analysis of minimum wage policy.

The purpose of this article is to show the impact caused by the Minimum Wage on the National economy. approach used In avoiding the exploitation of labor in Indonesia, the government as the highest authority of the country, issues labor regulations. The regulation regulates the Minimum Wage that companies must pay to workers. The minimum wage is a safety device from the government to prevent the exploitation of Indonesian workers. However, many of the Indonesian workers are not aware that the application of the minimum wage is by the decent standard of living set by the government. They do a lot of prosecutions so that the minimum wage they get is always increasing. If analyzed, the demand for rising minimum wages will also harm the nation's economy. In other words, that the government policy regarding minimum wages, which had wanted to protect labor exploitation, if not implemented properly, would adversely affect the economic development of thecommunity.

Although under the Treaty on the Functioning of the European Union the EU does not have competence to set minimum wages (Article 153), the EU adopted a directive on an adequate minimum wage in 2022. The aim of the directive is to encourage the convergence of national minimum wages upwards, ensuring a decent standard of living in all EU countries. The purpose of this article is to analyse the actions included in the Directive and to assess the adequacy of its legal framework. Interest in the new EU minimum wage regulations stems from the ineffectiveness of the existing and temporarily 'paused' mechanism in Russia, which links the minimum wage to 42% of the median wage. In an explanatory memorandum to the law which reformed the minimum wage in Russia in 2021, the authors refer to the "European experience". An analysis of the new EU directive showed that although it is largely advisory in nature, the EU obliges member states to ensure a decent level of the minimum wage that can be calculated on the basis of 60% of the median gross wage or 50% of the average gross wage. In addition, the EU establishes the factors to be taken into account in determining the minimum wage: the purchasing power of the statutory minimum wage in relation to the cost of living; the general level of wages and their distribution; the rate of wage growth; long-term national productivity levels and its development.

One of the minimum wage problems is caused by workers/laborers' needing to agree with the wage increase set. The minimum wage increase is still minimal compared to the high worker need. The Labor Organization president called the government to raise the provincial minimum wage (UMP) and district/city minimum wage (UMK) 2024 by 15%. This figure is obtained from the Decent Living Needs (KHL) survey results and other indicators such as inflation and economic growth. On the other hand, the minimum wage increase of 15% is considered by employers to be unrealistic, considering the condition of the national economy is hit by uncertainty. The government said that determining the minimum wage based on PP 36/2021 and considering the welfare of workers/laborers’ also looks at the Company's capabilities. This paper aims to see new macroeconomic and welfare conditions due to the increase in the minimum wage by 15%. Using the general equilibrium model of static computing (CGE), the analysis results show that an increase in the minimum wage leads to a decrease in demand for labor, especially in labor-intensive sectors. The increase in wages impacts increasing household income, thus indicating an increase in household welfare. However, inflationary pressures brought about by the minimum wage increase mask the increase in revenue, resulting in a decrease in household consumption budgets. This translates into a loss of net well-being, with a more significant impact on urban households than rural households. The output of most sectors, especially labor-intensive sectors, declined, but nominal GDP increased. The increase in nominal GDP is due to rising prices, not actual economic output.

This study examines how employment and wages for men and women respond to changes in the minimum wage in India, a country known for its extensive system of minimum wage regulations across states and industries. Using repeated cross sections of India's National Sample Survey Organization employment survey data for the period 1983–2008 merged with a newly created database of minimum wage rates, we find that, regardless of gender, minimum wages in urban areas have little to no impact on labor market outcomes. However, minimum wage rates increase earnings in the rural sector, especially for men, without any employment losses. Minimum wage rates also increase the residual gender wage gap, which may be explained by weaker compliance among firms that hire female workers.

AbstractThis article explores how the legal system has constructed, over time, the concept of the “wage”. Drawing on insights from classical political economy it contrasts a conception of the wage as the cost of social reproduction (a “social wage”), with the neoclassical notion of the wage as the price of a commodity (a “market wage”) that we see embedded in legal and political discourse today. Drawing on historical sources, it explores how these competing ideas of the wage have been reconstructed in juridical language in case law and legislation over time, exploring at the same time the impact of this process on the relationship between minimum wages and tax credits. This analysis is then used to shed light on the conception of the wage embedded in the National Minimum Wage Act 1998, providing a critical re-evaluation of the “National Living Wage” introduced in 2016.

The attainment of ‘fairness’ is widely regarded as a worthy goal of setting minimum wages, but opinions differ sharply over how to achieve it. This article examines how interpretations of fairness shaped the minimum wage decisions of the Australian Industrial Relations Commission between 1997 and 2005. It explores the Commission's approaches to three aspects of fairness in minimum wages: first, eligibility for increases; second, the form of increase; and third, the rate of increase over time. The Australian Industrial Relations Commission consistently gave minimum wage increases that were expressed in dollar values and applied to all federal awards. Its decisions delivered real wage increases for the lowest paid, but led to falls in real and relative wages for the majority of award-reliant workers. Fair Work Australia, the authority now responsible for setting minimum wages in the national system, appears apprehensive about parts of the Australian Industrial Relations Commission's legacy and has foreshadowed a different approach, particularly with respect to the form of adjustment.

In 1983 two million employees in South Africa were subject to minimum wages in terms of industrial council or wage board legislation. Studies of wage determination have been hampered by the lack of knowledge of actual wage rates. This paper compares the wage rates as laid down by the Industrial Council for the Iron. Steel, Engineering and Metallurgical Industry with the wages contained in a national salary survey, the latter representing 'actual' market wages. A job evaluation system has been used as the basis of comparison between the minimum and market rates. Both minimum and actual wages display similar characteristics in that the lowest levels have received the greatest (real) increases over the period under consideration. The upper skilled levels have seen a decrease in wages in real terms, with increases in actual wages being lower than the rates at which the minimum rates have increased. Explanations are sought both from an economic and a socio-political point of view.

South Africa is a country with low GDP growth, one of the highest unemployment rates in the world, coupled with the highest gini co-efficient in the world. A national minimum wage of R3500 has been tabled by government for 2018. The agricultural sector of South Africa employs a large portion of the countries labour force and currently pays a minimum wage of R3001.13. This research aimed to establish what the potential effects of a national minimum wage would be on a sector which has already experienced vast changes in its minimum wage policy with the implementation of a sectoral minimum wage increase in 2012. It must be noted that while this was an exploratory study and therefore not exhaustive of all details, the response from the farmers interviewed depicts that the national minimum wage will have far reaching negative impacts. Based on the experience of the 2012 uprising, farmers predict employment statistics of both permanent and seasonal workers, will decrease, as well as having an adverse effect on supporting industries and local community businesses, and lastly an increase in crime rates.
Mini Dissertation (MBA)--University of Pretoria, 2017.
km2018
Gordon Institute of Business Science (GIBS)
MBA
Unrestricted

Studies of the minimum wage, particularly of its impact on the labour market, have raised interesting but contentious questions among researchers and policymakers alike. There have been a number of studies which examine the impact of the National Minimum Wage on the UK labour market, but little has been done to examine the effects of the minimum wage on non-wage benefits. There is also a paucity of studies that examine the effects of the minimum wage on migrant workers. This study aims to fill this gap by examining the effects of the minimum wage on the non-wage benefits of migrant workers. Therefore three important and interrelated issues are examined in theoretical and empirical contexts: (i) the effects of the minimum wage on a wide range of non-wage benefits, (ii) the effects of the minimum wage on migration, and (iii) the effects of the minimum wage on the non-wage benefits of migrant workers. It is argued that to some extent the minimum wage has had adverse effects on both non-wage benefits and migrant workers. Primary and secondary research has been conducted by applying mainly positivist quantitative methodology, complemented by a qualitative approach (i.e. a number of interviews) to examine the effects of the minimum wage on the non-wage benefits of migrant workers. The secondary data has been collected from three major labour surveys in the UK: the Annual Survey of Hours and Earnings (ASHE), the Workplace Employee Relations Survey (WERS), and the Labour Force Survey (LFS). The primary data has been collected through a face-to-face questionnaire survey of 200 London-based migrants who have low-paid, low-skilled jobs. The secondary data is analysed using Difference-in-Difference (DID) analysis, while the primary data is analysed through regression analysis, the Pearson’s Chi-squared coefficient, descriptive statistics and qualitative analysis. It is shown through regression that the minimum wage is likely to create adverse effects in the UK labour market, particularly for migrant workers. It was found that the minimum wage has significant negative influences on migrants’ access to numerous valuable non-wage benefits, such as training, holiday pay, paid sick leave and pension schemes. Accommodation/housing, which is a non-wage benefit pertinent to the minimum wage, was also found to be an excuse for not paying statutory wages. Migrants who work in the minimum wage sectors are also less likely to receive health/life insurance. Nevertheless, DID analysis overall shows no evidence that the minimum wage reduces the provision of non-wage benefits. The thesis conclusion addresses the implications of these findings for National Minimum Wage policy, in particular to encourage policymakers to consider the minimum wage’s adverse effects on the UK labour market. The thesis makes some recommendations for National Minimum Wage policy in relation to both non-wage benefits and migrant workers.

This dissertation examines whether the introduction of a national minimum wage may contribute to social justice and economic growth in South Africa. After highlighting the socio-economic environment of both countries, the dissertation analyses the minimum wage from an international law perspective. Emphasis is put on the essential elements that minimum wage frameworks must address, namely: universal coverage of the minimum wage; the periodic adjustment of the minimum wage; interaction with collective bargaining; and compliance. These elements are also considered while reviewing and setting into context the current German minimum wage legislation. Subsequently, the National Minimum Wage Bill for South Africa is illustrated and comparatively assessed. It is discussed whether the essential elements and socio economic conditions are considered adequately in the Bill. Moreover, problematic provisions are identified and the need for certain amendments is argued. Conclusively, the dissertation takes an overall positive view on the Bill and promotes a simple minimum wage legislation embedded in a collective bargaining system and supported by multiple policies.

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This thesis has as its research subject the Act nº 11.738-2008 that establishes the Brazilian public schools teachers PSPN - National Professional Minimum Wage from basic education, which is the result of these teachers political struggle along history. This Act also regulates the pedagogical time, which is the time spent in the classroom and the complementary time, the time needed to, among other things, prepare the classes, and it values the career. This study, developed throughout the Doctorate in Education (2012 to 2015), investigates the set of contradictions in the PSPN Act. It has as its main goal to verify if this Act is bringing more acknowledgement to the teachers who work in the public municipal schools located on the Territorio do SertãoProdutivo da Bahia - Bahia s Productive Inland Territory, and if it s improving their work condition and life quality. As specific goal we look for the comprehension of concepts like time, wage, remuneration, surplus value, immaterial work and unproductive work. These are basic elements to the comprehension of both the disclosed subject and phenomenon. And also to know the daily work of the teachers who work in the 5º year of the elementary school, while observing the implications of the Act nº 11.738-2008 concerning time and wage, showing the struggle of this teachers trough their Labor Unions. The daily work that was changed because of the increasing new requirements has been bringing the intensification of the work conditions and making them precarious. The adoption of neo-liberal policies kept the people of this occupation form fighting for deserving conditions of work and wage. The reality reading took as its theoretical basis the historical and dialectic materialism and the methodological categories of contradiction, totality and mediation. The content categories of wage and timeshift were analyzed historically within a non-linear logic and made it possible to organize conceptually time as social relation in its various cycles. The field research, that was done in the Território do Sertão Produtivo da Bahia (Bahia s Productive Inland Territory) had as its individuals Syndicate directors, municipal secretaries of education and teachers of the 5º year of the Elementary School. Semi-structured inquiries and interviews have been used as well as document analysis to put the study in a context. Dialogues with the following authors have been established: Bernardo (1985, 1987, 1989, 1993), Bruno (1996, 2011), Lombardi (2011), Marx & Engels (1982, 1996), Saviani (2005, 2013) and Silveira (2012, 2014), among others. Trough the intermediary of the adopted procedures in the data analysis, we conclude historical struggle between capital and work remains in evidence, due to its re-structuration by the capital, present in municipal school organization, trough the precarious outsourcing work, specially the teachers which is now named hourly worker or teaching assistant, adjunct or substitue. As for the usage of the time- the profile that prevails among the surveyed teachers is the one of a woman, mixed-race, aging between 34 to 50 years, married, they have two children at average, most of them are religious and wake up between 5 and 6 a.m. These teachers use the time in a very similar way, they work both in education and homemaking at their own houses. They believe that with their work they contribute to the improvement of society. The 1-3 time is not enough to develop their work that are assistant to the teaching in class, and necessary to the development of his or her occupation, they still use their payed resting days to do this kind of work. The retirement pension is one of the main problems to be solved, because teachers do not receive the minimum wage. The surveyed individuals think that it has been improvements in it, but it is far from the ideal.
A presente tese tem como objeto a Lei n.º 11.738-2008, que instituiu o Piso Salarial Profissional Nacional (PSPN) para os profissionais do magistério público da educação básica, resultado da constante luta dos professores ao longo da história. Essa lei também regula o tempo de trabalho pedagógico em sala de aula e de atividades complementares à docência e valoriza a carreira. O estudo, desenvolvido no decurso do Doutorado em Educação (2012 a 2015), investiga o conjunto das contradições presentes na Lei do PSPN, tendo como objetivo geral verificar se sua implementação está proporcionando mais reconhecimento profissional, e melhores condições de trabalho aos professores da educação básica, que atuam na Rede Pública Municipal no Território do Sertão Produtivo na Bahia. Como objetivo específico, buscamos compreender os conceitos de tempo, salário, remuneração, mais-valia, trabalho imaterial e trabalho improdutivo. Esses elementos são fundantes para a compreensão do objeto e do fenômeno desvendado e para o conhecimento do cotidiano dos professores que atuam no 5º ano do Ensino Fundamental, observando as implicações da Lei n.o 11.738-2008 no que diz respeito ao tempo e ao salário, dando visibilidade à luta desses professores por meio de seus sindicatos. O cotidiano, modificado com o aumento de novas exigências tem levado à intensificação e à precarização das condições de trabalho do professor, e a adoção das políticas neoliberais impeliu a categoria a lutar por condições dignas de trabalho e salário. A leitura da realidade tomou como base teórica o materialismo histórico dialético e as categorias metodológicas da contradição, da totalidade e da mediação. As categorias de conteúdo salário e tempo-jornada de trabalho foram analisadas historicamente dentro de uma lógica não linear e possibilitaram organizar, conceitualmente, o tempo como relação social em seus diversos períodos. A pesquisa de campo, realizada no Território do Sertão Produtivo, na Bahia, teve como sujeitos diretores sindicais, secretários municipais de educação e professores do 5º ano do Ensino Fundamental. Utilizaram-se questionários e entrevistas semiestruturadas, bem como análises de documentos para contextualizar e caracterizar o estudo. Estabeleceu-se o diálogo com autores diversos, dentre os quais Bernardo (1985, 1987, 1989, 1993), Bruno (1996, 2011), Lombardi (2011), Marx e Engels (1982, 1996), Saviani (2005, 2013) e Silveira (2012, 2014). Por intermédio dos procedimentos adotados na análise dos dados constatamos que, a histórica luta entre o capital e o trabalho permanece em evidência com a sua reestruturação promovida pelo capital, presente na organização escolar municipal, por meio do trabalho terceirizado e precarizado, principalmente o do professor que passa a ser denominado de horista, auxiliar de ensino, adjunto, substituto. Quanto ao uso do tempo, o perfil que prevalece dos professores pesquisados é retratado por mulheres, pardas, com idade entre 34 a 50 anos, casadas, mães de dois filhos em média, cultivam a religiosidade e acordam entre 5 a 6 horas da manhã. Essas professoras utilizam o tempo de forma bastante parecida, trabalham na educação e em casa realizando atividades domésticas correntes e administrativas. São convictas de que com o seu trabalho contribuem para melhoria da sociedade. O tempo de 1-3 não é suficiente para desenvolverem as atividades extraclasses necessárias ao bom desempenho da função; ainda utilizam os dias destinados ao descanso remunerado para realizarem os trabalhos escolares. A aposentadoria constitui um dos principais problemas a ser enfrentado, pois os professores não recebem o piso salarial. Os sujeitos pesquisados entendem que houve melhoras, que conseguiram avançar, mas ainda estão longe do ideal.

Mestrado em Economia e Políticas Públicas
Uma avaliação temporal assume-se como essencial para averiguar a relevância do Salário Mínimo Nacional (SMN) no emprego em Portugal. A estimação de um modelo econométrico de Vetor Autorregressivo (VAR) possibilita testar a correlação e causalidade entre as diferentes variáveis, permitindo concluir, com algum grau de fiabilidade, acerca dos resultados alcançados. Os resultados obtidos neste trabalho podem indicar que a correlação entre as variáveis em análise é relativamente baixa, o que, potencialmente, pode significar que apesar do SMN ter aumentado ao longo dos últimos anos e a taxa de desemprego ter vindo a diminuir, não existe uma relação de causalidade relevante entre ambos. O mesmo acontece no caso do consumo privado, atividade económica e inflação, cujas respostas são não significativas face a impulsos do SMN. Desta forma, o aumento do SMN não parece ter um efeito positivo, ou negativo, nos níveis de emprego em Portugal.
A time-framed analysis is essential to assess the relevance of the minimum-wage (SMN) to employment in Portugal. The estimation of an Vector Autoregressive (VAR) econometric model gives the possibility to test the correlation and causality between different variables, allowing to take reliable conclusions concerning the achieved results. The results obtained in this study suggest that the correlation between the analysed variables is relatively low, wich might mean that the rise of the minimum wage over recent years and the fall of the unemployment rate are not correlated. This is also true for the levels of private comsumption, economic activity and inflation rate, which respond non significantly to impulses in the minimum wage. As such, the rise of the minimum wage does not seem to have a positive efect in the rise of the employment levels in Portugal.
info:eu-repo/semantics/publishedVersion

Income inequality is prevalent in both developed and developing countries. In all of these countries there are workers who are highly paid while others are given very low wages. The disgruntled low-paid workers in these countries usually force their governments to intervene in the labour market and introduce the redistributive policies like the minimum wage policy. Governments usually accede to these demands of low-paid workers because they do not want to invite political troubles. That led to an increase in the number of countries using minimum wage policy as redistributive mechanism in the late 20th century and the beginning of the 21st century. Minimum wage policy is, however, a very controversial issue. Supporters of minimum wages regard the policy as ideal because it provides social protection to un-unionised and low-paid workers with little or no bargaining power. The opponents of the policy on the other hand argue that wages in the labour market should be determined by the forces of demand and supply. It is argued that wages that are artificially determined lead to the rationing of jobs and displacement of the very same low-paid workers that the policy is intended to protect, as employers are forced to replace unskilled workers with skilled workers and machines. South Africa’s agricultural sector workers were among some of the least paid workers in the country. Employers were able to exploit these workers because they were not protected by any labour legislation that workers in other sectors were afforded. Farm workers were only protected by common law. It was only in the 1990s that labour legislations like Basic Conditions of Employment Act, Labour Relations Act, Employment Equity Act, Extension of Security Act and Tenure Act and Skills Development Act were extended to the agricultural sector in an attempt to protect the working conditions of vulnerable workers. These acts as well failed to improve the working conditions of the agricultural sector workers and that prompted the Minister of Labour to instruct the Director-General of Labour to conduct the necessary investigations to see if it could be necessary to introduce minimum standard of employment in the sector, including minimum wages. That led to the adoption of Sectoral Determination 8 of 2003 which introduced sectoral minimum wage in the sector. The sectoral minimum wage which came into effect in 2003 was increased annually by the rate of inflation plus one per cent. It was only in 2013, after the Western Cape farm workers went on strike for higher wages, that the minimum wage was raised by 52 per cent. As argued by the opponents of minimum wages, job losses occurred among unskilled workers. The implementation of minimum wage policy in the agricultural sector was problematic, as the policy was not properly complied with due to several compliance concerns. Apart from there being insufficient inspectors to monitor and investigate cases of non-compliance, inspectors were under-trained and under-equipped. Fines imposed on offenders were too small, which further encouraged disregard for the policy.
Economics
M. Com. (Economics)

碩士
國立東華大學
公共行政研究所
96
In Taiwan, the National Health Insurance Act was promulgated on August 9, 1994 and put into enforcement on March 10, 1995. Since then, all nationals of our country have been provided with comprehensive medical care services including outpatient services, inpatient services, home care and in-community rehabilitation by means of self-aid, mutual-support and risk proportioning, which have significantly minimized the financial barriers against the public from medical treatment. The National Health Insurance is primarily backed by the insurance premium which is jointly borne by the insured (insurants), the Group Insurance Applicants and government authorities in various levels. The amounts of insurance premium generally depend on the salary levels and the number of the insured (insurants). The Executive Yuan (the Cabinet) raised the minimum basic wage up to NT$17,280 per month starting on July 1, 2007. It deserves to analyses and studies the relationships of upon the National Health Insurance services with the increase of the wages. This study is primarily intended to probe into the impact incurred by the improvement of the basic wage upon the number of the insured (insurants), the Group Insurance Applicants, the average amounts of insurance fees and the collection rate of the insurance premium, based on the three intervals of August till December 2005, August till December 2006 before the improvement and August till December 2007 after the improvement. Our study finds that the numbers of the insured (insurants), the Group Insurance Applicants, average amounts of insurance fees demonstrate a significant difference, whereas the collection rate of the insurance premium presents less significant diversity. Since the basic wage was improved, the number of Category I of the Group Insurance Applicants has continually increased every month, with the growth rate outperforming that of the overall Group Insurance Applicants. It is shown that the entrepreneurs are willing to comply with the current improvement of the basic wage. The average amounts of insurance fees have significantly increased. Especially, the collection rate of the insurance premium has increased from negative into positive growth. To put it in more understandable terms, the raise of the basic wage still has a positive influence upon the National Health Insurance. However, it is shown that a significant decreasing trend of the number of the insured (insurants). That suggests that the insured (insurants) could have switched their Insured classification. Moreover, the insured (insurants) with the low incomes could choose to suspend the service of the National Health Insurance. According to the National Health Insurance Act, the insured (insurants) are classified into six categories and fourteen subcategories. Based on the monthly payment or on the fixed amount..the insured (insurants) pay the insurance premium. In response to the current increase of the basic wage, the tables of insurance amounts and premium rates have been adjusted at the same time. The Bureau of National Health Insurance has made great efforts to proceed with the administrative and coordinating tasks, which is furtherrnore verifying the complicated procedures of the related works. In the upcoming amendments of the National Health Insurance Act which is being drafted, the insured (insurants) are simply streamlined into two categories. Finally, the insurance premiums are adjusted to depend on the total amounts of income, making the National Health Insurance be fairer and more rational than ever.

AbstractThe author charts the experience of working on the frontline public health response during the pandemic. The UK’s initial public health response to the pandemic comprised a delayed lockdown, shortages of personal protective equipment (PPE), insufficient testing capacity, and ambivalence about mask wearing. The pandemic’s first wave ravaged the health and care sectors. Subsequently, with experience and tight testing regimes, management of COVID-19 in the care sector was improved enormously. Hospitals reduced their workload to a bare minimum initially, followed by designing separate pathways to facilitate elective work, underpinned by testing and infection control. In addition to the elderly and frail, those on the fringes of society—for example, homeless, refugees, asylum seekers, and prison populations experienced high rates of infection and mortality. Nation-wide restrictions on movement were propped by an economic support program. The new school year in 2020 began amid rising cases, as people struggled to interpret confusing policies. Workplaces did not emerge from remote working till mid-2021 and remain a hub of infection transmission. The tussle between maintaining economic activity and education versus preventing the spread of cases continues, while the focus of the public health response moves to high vaccination coverage, rapid testing, and responding robustly to emerging variants of concern.

Each Concentrate revision guide is packed with essential information, key cases, revision tips, exam Q&As, and more. Concentrates show you what to expect in a law exam, what examiners are looking for, and how to achieve extra marks. This chapter discusses the law on employee wages. An employer may be required to pay wages even if there is no work for the employee to do. Part II of Employment Rights Act 1996 deals with the protection of wages. The National Minimum Wage Act 1998 (NMWA) provides a minimum hourly wage for workers. A higher minimum wage for those over 23 (until 2021, this was 25), the National Living Wage, was introduced in 2016.

This chapter explores the modern minimum wage framework in detail. The first section begins by exploring the background to the National Minimum Wage Act through the lens of the relationship between minimum wages and wage supplementation. The second section then explores the conceptual structure of the Act in more detail. In particular, it explores how an individual’s minimum wage entitlement is assessed; the types of ‘work’ that are either implicitly or expressly, excluded from the Act; and the content of the concept of the ‘wage’. It concludes with some remarks about what the Act’s structure implies about the legal system’s understanding of the role of minimum ‘wage’ regulation today.

EU countries are trying to rationalise the processing of many agendas at both international and national level. The holy grail being sought is the digitisation of all available agendas.. In our paper, we address the issues of wages of workers who work in the field of information and communication technologies - ICT Professionals. We deal with the development of their number in the Czech economy over the last five years and also with the development of their nominal wages. In addition, we also look at the issue of gender pay gap in ICT. For the data analysis, we used a set of surveys for the Ministry of Labour and Social Affairs on wages, which are conducted annually by Trexima Ltd. For data analysis we used mainly MS Excel tools - statistical functions and Python as well. The results show that the number of ICT Professionals in the Czech economy is permanently growing. The identified wage growth trends show that wages are growing fastest for ICT Manager and ICT Specialists positions - here the growth is faster than the overall wage growth in the Czech Republic. For ICT Technicians, although wages show an increasing trend, but it is lower than the wage growth trend in the Czech economy. In the Gender Pay Gap question, we concluded that it is minimal for ICT Professionals in public and state administration, but still very high in the business sphere. A positive phenomenon is that the Gender Pay Gap is decreasing permanently.

In this paper we present a methodology for the evaluation of significant wave heights, significant wave periods, maximum winds and minimum pressures using a modification of the original Hydromet-Rankin Vortex Model, Bretchneider (1990) and Holland (1980). The cyclone model is compared to the data series of 29 cyclones recorded by NOAA National Data Buoy Center bouys. Both models present very good results. For the analysis, the database uses 53 years of records, 541 hurricanes on the Atlantic Ocean. For the extreme analyses of wind and wave heights on the Mexican coasts, maps of the location and scale parameters used in the Gumbel cumulative distribution function and numerical results for 50 and 100 years return period are provided.

ABSTRACT Background: The government’s efforts to improve public health level are by providing excellent health service facilities, including promotion, preventive, curative, and rehabilitative. The outcome of quality health service can be measured by patient perception and satisfaction. This study aimed to examine factors affecting the perceived quality of service and patient satisfaction on inpatient care of Nabire Hospital, Papua, Indonesia. Subjects and Method: A cross-sectional study was carried out at Nabire regional hospital, Papua, Indonesia, from March to Mey 2020. A sample of 207 inpatients was selected by stratified random sampling. The dependent variable was patient satisfaction. The independent variables were age, income, and length of stay type class health insurance, working, and patient perception toward doctor, nurse, and inpatients facilities. The data were collected by questionnaire and analyzed by a multiple logistic regression. Results: Inpatients satisfaction decreased with age ≥50 years (OR= 0.72; 95% CI= 0.24 to 2.65; p= 0.720), income ≥Papua minimum wage (OR= 0.77; 95% CI= 0.22 to 2.73; p= 0.685), and length of stay ≥7 days (OR= 0.13; 95% CI= 0.03 to 0.53; p= 0.004). Inpatients satisfaction increased with class 2 and 3 (OR= 1.15; 95% CI= 0.43 to 3.07; p= 0.773), non national health insurance (OR= 1.21; 95% CI= 0.46 to 3.23; p= 0.700), working (OR= 2.13; 95% CI= 0.58 to 7.85; p= 0.258), good patient perception toward doctor (OR= 3.03; 95% CI= 1.15 to 7.99; p<0.001), good persepsi patient perception toward nurse (OR= 4.04; 95% CI= 1.15 to 14.17; p<0.001), and patient perception toward inpatients facilities (OR= 26.8; 95% CI= 11.0 to 65.32; p<0.001). Conclusion: Inpatients satisfaction decreases with age ≥50 years, income ≥Papua minimum wage, and length of stay ≥7 days. Inpatients satisfaction increases with class 2 and 3, non national health insurance, working, good patient perception toward doctor, good persepsi patient perception toward nurse, and patient perception toward inpatients facilities. Keywords: inpatients satisfaction, patient perception, health insurance Correspondence: Agustina Utii. Masters Program in Public Health. Universitas Sebelas Maret, Jl. Ir. Sutami 36A, Surakarta 57126, Central Java. Email: agustinautii1@gmail.com. Mobile: 081240051451. DOI: https://doi.org/10.26911/the7thicph.04.46

The study analysed the influence of individual factors on inflation, as well as the impact of inflation targeting on the exchange rate pass-through and inflation inertia. Data for 42 countries from 1980 to 2021 were used, but due to data gaps, fewer countries were assessed. The study of consumer price index (CPI) dynamics for 30 countries was performed using models with fixed country and time effects, showing its advantages over the model without fixed effects. As a result, the following factors affecting CPI in the period 1980–2021 were identified: gross domestic product of the previous year, real minimum wages, exchange rate of the national currency, as well as inflation lags of one and two years subject to the introduction of an IT policy. It was shown that inflation targeting helps reduce inflation inertia, which increases the effectiveness of monetary policy aimed at achieving the inflation target and improves economic indicators.

The main objective of this study is to identify how climate variability influences human comfort levels in tropical-coastal urban environments. San Juan Metro Metropolitan Area (SJMA) of the island of Puerto Rico was chosen as a reference point. Temperature and relative humidity are identified as key environmental variables to maintain human comfort level. A new Human Discomfort Index (HDI) using the key environmental variables based on environmental enthalpy is defined. This index is expanded to determine the energy required to maintain indoor human comfort levels and is compared to total electric energy consumption for the island of Puerto Rico. Regression analysis shows that both temperature and HDI are good indicators to predict total electrical energy consumption. Results showed that over the past 35 years the average environmental enthalpy have increased, resulting in the increase of average HDI for SJMA. Surface weather station data further shows clear indication of urbanization biases ramping up the HDI. Long-term local scale (weather station; 30-years record) data shows a decreasing rate of maximum cooling per capita at −11.41 kW-h/years, and increasing of minimum cooling per capita of 10.64 kW-h/years. This contrasts with regional scale data for the whole Caribbean where increasing trends are observed for both minimum and maximum energy per capita. To estimate human comfort levels under extreme heat wave events conditions, an event of 2014 in the San Juan area was identified. The analysis is complemented by data from the National Center for Environmental Prediction (NCEP) at 250km spatial resolution, North American Regional Reanalysis (NARR) at 32 km spatial resolution, and simulations of the Weather Research and Forecasting model (WRF) at a resolution of 1 km, and by weather station data for San Juan. Model results were evaluated against observations showing good agreement for both temperature and relative humidity and improvements from the NCEP input. It also shows that Energy Per Capita (EPC), required to maintain indoor space at human comfort level, in urban areas during a heat wave event can increase to 21% as compared to normal day.

The U.S. Department of the Interior, Minerals Management Service (MMS) is now tasked to collaborate with research institutions and industry on testing ocean wave and current energy conversion systems. Accordingly, MMS recently expanded the mission of its Ohmsett Facility to include such testing and research, Ohmsett, The National Oil Spill Response Research & Renewable Energy Test Facility, has one of the largest outdoor saltwater tanks in North America and is designed to evaluate the performance of model- and full-scale equipment under realistic environmental conditions. The facility, operated by MAR Incorporated under contract to MMS, is located at the Naval Weapons Station Earle Waterfront facility in Leonardo, New Jersey (about one hour drive south of New York City). At the heart of Ohmsett is a very large outdoor, above-ground concrete test tank that is 203 meters long, 20 meters wide 3.5 meters deep and holds 10 million liters of crystal clear salt water. The Ohmsett tank is equipped with three movable bridges providing speeds of up to 6.5 knots, programmable in 1/100th knot increments, to simulate ocean currents or vehicle speeds. The robust tow bridges are able to accommodate the torques and forces of the largest current turbines and wave energy converter (WEC) equipment. The Control Tower is fully computerized and data from various sensors and video cameras are collected for analysis. The Ohmsett tank system allows testing of fullscale equipment. The tank's wave generator creates realistic sea environments, while state-of-the-art data collection and video systems record test results. The data collection system is capable of recording up to 32 channels. The facility has proven to be ideal for testing developmental equipment, subjecting research findings to validation, and evaluating acquisition options. The new generator system, located at the south end of the tank, can produce waves at discrete frequencies with heights up to one meter, as well as FM Slides, and JONSWAP or Pierson-Moskowitz spectra with controlling parameters of driving wind velocity and scale ratio. Recognizing physical limits on wave-maker stroke, probabilities of clipping on axes of these two parameter values are displayed with their touch-pad selections. The theoretical stroke-to-wave height transfer gain of the wave flap is being compared with a number of measurement observations. Customers may specify their own wave characteristics if they are not adequately represented by these standard types. A new beach system is being developed at the north end of the tank that will allow long runs of variable wave incidence with minimal interference from reflections. The facility includes a well-equipped machine shop and assembly area, and extensive lifting and transport capabilities. As well as its renewables mission, “Oil Patch” business is invited. Potential users will find a skilled technical staff, relaxed hands-on atmosphere and a very attractive financial environment.

This paper presents a multi-level Extended Pattern Search algorithm (EPS) to optimize both the local positioning and geometry of wind turbines on a wind farm. Additionally, this work begins to draw attention to the effects of atmospheric stability on wind farm power development. The wind farm layout optimization problem involves optimizing the local position and size of wind turbines such that the aerodynamic effects of upstream turbines are reduced, thereby increasing the effective wind speed at each turbine, allowing it to develop more power. The extended pattern search, employed within a multi-agent system architecture, uses a deterministic approach with stochastic extensions to avoid local minima and converge on superior solutions compared to other algorithms. The EPS presented herein is used in an iterative, hierarchical scheme — an overarching pattern search determines individual turbine positioning, then a sub-level EPS determines the optimal hub height and rotor for each turbine, and the entire search is iterated. This work also explores the wind shear profile shape to better estimate the effects of changes in the atmosphere, specifically the changes in wind speed with respect to height on the total power development of the farm. This consideration shows how even slight changes in time of day, hub height, and farm location can impact the resulting power. The objective function used in this work is the maximization of profit. The farm installation cost is estimated using a data surface derived from the National Renewable Energy Laboratory (NREL) JEDI wind model. Two wind cases are considered: a test case utilizing constant wind speed and unidirectional wind, and a more realistic wind case that considers three discrete wind speeds and varying wind directions, each of which is represented by a fraction of occurrence. Resulting layouts indicate the effects of more accurate cost and power modeling, partial wake interaction, as well as the differences attributed to including and neglecting the effects of atmospheric stability on the wind shear profile shape.

The goal for Concentrated Solar Power (CSP) mirror is not just reflection, but the complete capture and utilization of the entire solar spectrum. Solar radiation is emitted over a range of wavelengths, analytically measured between 250–2500 nm, to ensure maximum captivation. An effective solar mirror, utilized for concentrating this energy must be capable of maintaining a high level of reflectance, under adverse environmental conditions for a prolonged duration in a CSP system. Thin (1-mm) flat low-iron, silvered glass mirrors have been utilized for CSP applications for many years, but obstacles with respect to quality and durability have had to be overcome. Developments have improved the reflectance from averages in the low 90% range to averages between ∼96%–97%. The reflectance durability standard for utilization of mirror for solar applications requires a minimal reflective loss of less than 5% over a 15 year period in the field. The ultimate goal is to expand the solar mirror’s field life to 20–30 years, the life of a CSP system. Overcoming harsh accelerated testing parameters continues to be the focus, as these tests attempt to correlate the lifetime to actual field applications. Test chambers with elevated temperatures and humidity conditions continue to be the most severe, and results continually show dramatic improvement. Focus was drawn on the loss of spectral reflectance, as degradation was occurring at a rapid rate specifically with the lower wave spectra. Drawing on the expertise and direction of the National Renewable Energy Laboratory (NREL), CSP thin-glass mirrors are emerging to be a viable choice for solar concentration. Thinglass mirrors offer a low-weight, highly reflective option, that resists harsh weather conditions, including water and humidity variances along with surface contamination. Mirror coating advancements have exceeded the physical and chemical resistance properties of standard “off the shelf” mirror coating products to precise, industry specific components. This study will review the obstacles and highlight the progress that has led to the success of the thin-glass mirror CSP market. A compilation of test results from NREL and other analytical, laboratories along with the collaboration of mirror manufacturing expertise from a vast knowledge base in the chemically plated mirror industry. It is the primary focus of the industry to continue to strive for a superior quality concentrating mirror while making it economically viable to the solar industry.

La política de vivienda en México, implementada en el año 2002, otorgó un apoyo pleno a la iniciativa privada para participar en la producción de la vivienda social. La primera acción que el gobierno federal realizó fue la institución de la Comisión Nacional para el Fomento a la Vivienda, CONAFOVI (hoy CONAVI), órgano descentralizado de la Secretaría de Desarrollo Social, SEDESOL, creado por el Presidente de la República en el año 2001. Esta Comisión tiene como responsabilidad diseñar, promover, dirigir y coordinar la política nacional de vivienda. Aún cuando atiende a los diversos niveles, desde vivienda residencial hasta interés social, incide particularmente en esta última, vista ahora como un producto inmobiliario de muy alta rentabilidad, cuyo financiamiento está asegurado por los programas subsidiarios del gobierno, y es promovida, además, por el mismo sector público por considerarse un importante generador de actividad económica e impulsor del desarrollo del sector, creando un círculo virtuoso que inminentemente impacta los aspectos sociales y culturales aún en tiempos de recesión. Si bien la producción de vivienda social se vio estimulada en todo el país, fue en la frontera norte, particularmente en Ciudad Juárez, Chihuahua, donde el eco de este programa tuvo mayor magnitud. En ella se produjo la mayor producción de vivienda económica en cuatro ocasiones consecutivas, de 2004 a 2007, a nivel a nivel nacional. Ciudad Juárez es una de las 52 zonas metropolitanas de México, el principal polo de desarrollo del Estado en donde se asienta el 40.52% de la población de la entidad y la sexta ciudad en el país en cuanto a tamaño de habitantes se refiere. Aproximadamente el 82% de la PEA tiene ingresos iguales o menores a 4 salarios mínimos, lo cual la hace potencialmente beneficiaria de créditos de vivienda económica. Este hecho puede tener diversas lecturas, sin embargo, la que ahora merece nuestra atención es el impacto que este fenómeno ha tenido en el suelo de uso habitacional y la participación que han tenido el sector público y el privado en su ocupación durante el periodo 2001 a 2006, así como la presión inmobiliaria que se ha ejercido y derivado en la ampliación del fundo legal del municipio sin estar esto considerado en el Plan de Desarrollo del Municipio de Juárez. Los diferentes porcentajes de participación en la producción de vivienda social del sector público y privado con su proyección en la utilización de suelo, la ubicación de los conjuntos habitacionales desarrollados así como el número de acciones de vivienda realizadas de acuerdo a sus diversos tipos: social, media y residencial, al sumarse constituyen un importante segmento de la panorámica que habrá de llevarnos a conocer el impacto que la política nacional de vivienda ha tenido en la ciudad que ha sido su mejor receptora, y por tanto, su mejor ejemplificación. A siete años de distancia, tenemos una ciudad segregada, desarticulada y con grandes superficies vacías a su interior. El crecimiento disperso y la cuestionable “demanda de vivienda” han producido un paisaje en donde los barrios consolidados lucen abandonados. A la par, un alto porcentaje de viviendas emplazadas en los nuevos fraccionamientos ni siquiera han sido habitadas ante la falta de accesibilidad a equipamiento y servicios urbanos. El aval de las políticas públicas para adquirir una segunda vivienda, aún de interés social, ha hecho que éstas de incorporen al mercado de vivienda en renta pese a que ello se contrapone a su carácter social. En síntesis, tenemos que el apoyo incondicional a la producción de vivienda social sin visualizar sus efectos colaterales, han sido la piedra angular para la expansión irracional de las ciudades mexicanas. Mexico's housing policy, created in the year 2002, gave the private sector whole support to participate in the production of social housing. The first action of the federal government was creating the National Commission for Housing Support, (CONAFOVI, later CONAVI), a decentralized organization of the Secretary of Social Development, SEDESOL, created by the President on 2001. This Commission has the responsibility to design, promote, direct and coordinate the national housing policy, which despite supporting different housing levels, from high income to social housing, now seen this last one as a highly profitable real state product, whose credit is insured by the government's subsidies. The social housing is promoted by the public sector itself since its considered an important source of economic activity even while in times of a recession and to economic development is granted and being a support for the sector development, creating a virtuous circle which imminently impacts on social and cultural aspects. Though social housing development was stimulated in the whole country, it was in the northern border, particularly in Ciudad Juarez, Chihuahua, where the echoes of this program had a greater magnitude; so much that it is responsible for the biggest production of economical housing on four consecutive years, from 2004 to 2007, in the whole country. Ciudad Juarez is the main pole of development in the state, where 40.52% of the state's population resides and proximately 82% of the PEA has an income equal or less than four minimal wages, which makes it a potentially beneficiary of economic housing credits. This fact can have several different readings, nevertheless the one now deserves our attention is the impact this phenomenon has had in the residential land use and the participation that the public and private sector have had in its occupation during the 2001 to 2006 period, as well as the real state pressure that has been exerted and is responsible for increasing the city limits without taking into account the Municipal Development Plan of Juarez. The different percentages of participation in the production of social housing by the public and private sectors with their projection in the land use, the location of developed housing sectors and the number of housing actions that have taken place according to their diverse levels: social, middle and high income, when added constitute an important segment of the panorama that will take us to know the impact that the national housing policy has had in the city, which has been its main receptor, thus, its best example. Seven years in time, we have a city that suffers from segregation, disarticulation and with a great amount of inner empty spaces. Disperse growth and the questionable "housing demand" have produced a scenery in which consolidated neighborhoods look abandoned; along side, a high percentage of built homes in the new neighborhoods have not been inhabited because of the lack of equipment and urban services. The ability to acquire a second house, even if it is social level, has caused them to be incorporated to the rental market even though this contradicts their social character. In conclusion, we have found that unconditional support to the production of social housing without foreseeing its collateral effects has been a key factor for the irrational expansion in Mexican cities.

Employment charters are voluntary initiatives that attempt to describe ‘good’ employment practices and to engage and recognise those employers that meet or aspire to meet these practices. They can operate at different spatial scales, ranging from international and national accreditation schemes to local charters that focus on engaging employers in specific regions or cities. The latter are the focus of this briefing paper. At least six city-regions in England had local employment charters at the time of our research. These areas alone account for over a fifth (21 per cent) of the resident working-age population (based on ONS 2022 population estimates), highlighting the potential reach and significance of these voluntary initiatives in terms of setting employment standards, although the number of employers directly accredited with local schemes is still relatively small. Despite their popularity with policymakers, there is only limited research on local employment charters. A few studies have explored issues relating to the design, implementation and evaluation of charters, reflecting demand from policymakers for toolkits and support to develop local policy initiatives (e.g. Crozier, 2022). But several years into the implementation of some of these charter initiatives, and as more areas look to develop their own, we argue that it is time to revisit some more foundational questions around what local charters are for, and how far they can support ‘good work’ agendas. It remains to be seen which employers can and will engage substantively with these initiatives, how employer commitments might be validated and the good employment criteria enforced, and how local charters will be integrated with local authority commissioning and procurement practices (TUC, 2022). The local charters that have emerged so far within the UK have been conceived predominantly as employer engagement tools, adopting language and approaches designed to appeal to employer interests and priorities and emphasising the value that employers can derive from being part of the initiative. This contrasts with approaches emphasising the engagement of other constituents, like citizens and employees, as a route to influencing employer engagement (Scott, Baylor and Spaulding, 2016; Johnson, Herman and Hughes, 2022). This briefing paper shares findings from a scoping study involving key informants in the North West of England (2022-2023) which explored how local charter initiatives could influence employers to improve their employment practices. Participants in the study shared their views on: 1) How voluntary local employment charters could influence employers to change their employment practices? 2) What types of employers local charters could engage and influence? Alongside this study, we have also developed a series of case studies of the charters that have been introduced across six city regions in England. These encompass the Fair Work Standard (London); Good Employment Charter (West of England); Good Work Pledge (North of Tyne Combined Authority); Fair Employment Charter (Liverpool City Region Combined Authority); Good Employment Charter (Greater Manchester) and the Fair Work Charter (West Yorkshire Combined Authority). The case studies are published separately. Our conversations with policymakers, union representatives and campaigners indicate that while there are some potential ‘win-win’ outcomes from promoting good employment practices, there are also some key tensions that should be more clearly acknowledged. In particular, one point of divergence relates to what would be the most effective and meaningful way to engage with employers in order to secure improvements in employment practices. On the one hand, employment charter initiatives could set consistent, clear and relatively high standards of practice that employers could be required to meet from the outset, creating a clear dividing line between those employers who were engaged in some way with the initiative and those who are not. On the other, these initiatives could prioritise engaging as many employers as possible with few or no specific red lines (e.g. around paying the living wage) so that the charter provides an opportunity to work with employers to secure hopefully more substantive commitments down the road. There are challenges and trade-offs associated with both of these viewpoints. One problem with the former strategy of setting a consistent standard is that the principles of employment that the charter promotes may not be particularly stretching in some sectors, or indeed may only describe a minimum set of commitments for certain types of work; whilst in other sectors they may be viewed as being too stringent. A more incremental, flexible strategy of engaging with employers and working with them to change their employment practices, in contrast, relies on sustained commitment from both policymakers and employers. Whether charters can simultaneously offer a ‘safe space’ to employers to share information and change their practices whilst also operating in a more regulatory way appears as a fundamental tension in existing visions for these initiatives. We return to these different views on how to engage employers and secure change in the conclusion to this paper.

1.1 Macroeconomic summary Economic recovery has consistently outperformed the technical staff’s expectations following a steep decline in activity in the second quarter of 2020. At the same time, total and core inflation rates have fallen and remain at low levels, suggesting that a significant element of the reactivation of Colombia’s economy has been related to recovery in potential GDP. This would support the technical staff’s diagnosis of weak aggregate demand and ample excess capacity. The most recently available data on 2020 growth suggests a contraction in economic activity of 6.8%, lower than estimates from January’s Monetary Policy Report (-7.2%). High-frequency indicators suggest that economic performance was significantly more dynamic than expected in January, despite mobility restrictions and quarantine measures. This has also come amid declines in total and core inflation, the latter of which was below January projections if controlling for certain relative price changes. This suggests that the unexpected strength of recent growth contains elements of demand, and that excess capacity, while significant, could be lower than previously estimated. Nevertheless, uncertainty over the measurement of excess capacity continues to be unusually high and marked both by variations in the way different economic sectors and spending components have been affected by the pandemic, and by uneven price behavior. The size of excess capacity, and in particular the evolution of the pandemic in forthcoming quarters, constitute substantial risks to the macroeconomic forecast presented in this report. Despite the unexpected strength of the recovery, the technical staff continues to project ample excess capacity that is expected to remain on the forecast horizon, alongside core inflation that will likely remain below the target. Domestic demand remains below 2019 levels amid unusually significant uncertainty over the size of excess capacity in the economy. High national unemployment (14.6% for February 2021) reflects a loose labor market, while observed total and core inflation continue to be below 2%. Inflationary pressures from the exchange rate are expected to continue to be low, with relatively little pass-through on inflation. This would be compatible with a negative output gap. Excess productive capacity and the expectation of core inflation below the 3% target on the forecast horizon provide a basis for an expansive monetary policy posture. The technical staff’s assessment of certain shocks and their expected effects on the economy, as well as the presence of several sources of uncertainty and related assumptions about their potential macroeconomic impacts, remain a feature of this report. The coronavirus pandemic, in particular, continues to affect the public health environment, and the reopening of Colombia’s economy remains incomplete. The technical staff’s assessment is that the COVID-19 shock has affected both aggregate demand and supply, but that the impact on demand has been deeper and more persistent. Given this persistence, the central forecast accounts for a gradual tightening of the output gap in the absence of new waves of contagion, and as vaccination campaigns progress. The central forecast continues to include an expected increase of total and core inflation rates in the second quarter of 2021, alongside the lapse of the temporary price relief measures put in place in 2020. Additional COVID-19 outbreaks (of uncertain duration and intensity) represent a significant risk factor that could affect these projections. Additionally, the forecast continues to include an upward trend in sovereign risk premiums, reflected by higher levels of public debt that in the wake of the pandemic are likely to persist on the forecast horizon, even in the context of a fiscal adjustment. At the same time, the projection accounts for the shortterm effects on private domestic demand from a fiscal adjustment along the lines of the one currently being proposed by the national government. This would be compatible with a gradual recovery of private domestic demand in 2022. The size and characteristics of the fiscal adjustment that is ultimately implemented, as well as the corresponding market response, represent another source of forecast uncertainty. Newly available information offers evidence of the potential for significant changes to the macroeconomic scenario, though without altering the general diagnosis described above. The most recent data on inflation, growth, fiscal policy, and international financial conditions suggests a more dynamic economy than previously expected. However, a third wave of the pandemic has delayed the re-opening of Colombia’s economy and brought with it a deceleration in economic activity. Detailed descriptions of these considerations and subsequent changes to the macroeconomic forecast are presented below. The expected annual decline in GDP (-0.3%) in the first quarter of 2021 appears to have been less pronounced than projected in January (-4.8%). Partial closures in January to address a second wave of COVID-19 appear to have had a less significant negative impact on the economy than previously estimated. This is reflected in figures related to mobility, energy demand, industry and retail sales, foreign trade, commercial transactions from selected banks, and the national statistics agency’s (DANE) economic tracking indicator (ISE). Output is now expected to have declined annually in the first quarter by 0.3%. Private consumption likely continued to recover, registering levels somewhat above those from the previous year, while public consumption likely increased significantly. While a recovery in investment in both housing and in other buildings and structures is expected, overall investment levels in this case likely continued to be low, and gross fixed capital formation is expected to continue to show significant annual declines. Imports likely recovered to again outpace exports, though both are expected to register significant annual declines. Economic activity that outpaced projections, an increase in oil prices and other export products, and an expected increase in public spending this year account for the upward revision to the 2021 growth forecast (from 4.6% with a range between 2% and 6% in January, to 6.0% with a range between 3% and 7% in April). As a result, the output gap is expected to be smaller and to tighten more rapidly than projected in the previous report, though it is still expected to remain in negative territory on the forecast horizon. Wide forecast intervals reflect the fact that the future evolution of the COVID-19 pandemic remains a significant source of uncertainty on these projections. The delay in the recovery of economic activity as a result of the resurgence of COVID-19 in the first quarter appears to have been less significant than projected in the January report. The central forecast scenario expects this improved performance to continue in 2021 alongside increased consumer and business confidence. Low real interest rates and an active credit supply would also support this dynamic, and the overall conditions would be expected to spur a recovery in consumption and investment. Increased growth in public spending and public works based on the national government’s spending plan (Plan Financiero del Gobierno) are other factors to consider. Additionally, an expected recovery in global demand and higher projected prices for oil and coffee would further contribute to improved external revenues and would favor investment, in particular in the oil sector. Given the above, the technical staff’s 2021 growth forecast has been revised upward from 4.6% in January (range from 2% to 6%) to 6.0% in April (range from 3% to 7%). These projections account for the potential for the third wave of COVID-19 to have a larger and more persistent effect on the economy than the previous wave, while also supposing that there will not be any additional significant waves of the pandemic and that mobility restrictions will be relaxed as a result. Economic growth in 2022 is expected to be 3%, with a range between 1% and 5%. This figure would be lower than projected in the January report (3.6% with a range between 2% and 6%), due to a higher base of comparison given the upward revision to expected GDP in 2021. This forecast also takes into account the likely effects on private demand of a fiscal adjustment of the size currently being proposed by the national government, and which would come into effect in 2022. Excess in productive capacity is now expected to be lower than estimated in January but continues to be significant and affected by high levels of uncertainty, as reflected in the wide forecast intervals. The possibility of new waves of the virus (of uncertain intensity and duration) represents a significant downward risk to projected GDP growth, and is signaled by the lower limits of the ranges provided in this report. Inflation (1.51%) and inflation excluding food and regulated items (0.94%) declined in March compared to December, continuing below the 3% target. The decline in inflation in this period was below projections, explained in large part by unanticipated increases in the costs of certain foods (3.92%) and regulated items (1.52%). An increase in international food and shipping prices, increased foreign demand for beef, and specific upward pressures on perishable food supplies appear to explain a lower-than-expected deceleration in the consumer price index (CPI) for foods. An unexpected increase in regulated items prices came amid unanticipated increases in international fuel prices, on some utilities rates, and for regulated education prices. The decline in annual inflation excluding food and regulated items between December and March was in line with projections from January, though this included downward pressure from a significant reduction in telecommunications rates due to the imminent entry of a new operator. When controlling for the effects of this relative price change, inflation excluding food and regulated items exceeds levels forecast in the previous report. Within this indicator of core inflation, the CPI for goods (1.05%) accelerated due to a reversion of the effects of the VAT-free day in November, which was largely accounted for in February, and possibly by the transmission of a recent depreciation of the peso on domestic prices for certain items (electric and household appliances). For their part, services prices decelerated and showed the lowest rate of annual growth (0.89%) among the large consumer baskets in the CPI. Within the services basket, the annual change in rental prices continued to decline, while those services that continue to experience the most significant restrictions on returning to normal operations (tourism, cinemas, nightlife, etc.) continued to register significant price declines. As previously mentioned, telephone rates also fell significantly due to increased competition in the market. Total inflation is expected to continue to be affected by ample excesses in productive capacity for the remainder of 2021 and 2022, though less so than projected in January. As a result, convergence to the inflation target is now expected to be somewhat faster than estimated in the previous report, assuming the absence of significant additional outbreaks of COVID-19. The technical staff’s year-end inflation projections for 2021 and 2022 have increased, suggesting figures around 3% due largely to variation in food and regulated items prices. The projection for inflation excluding food and regulated items also increased, but remains below 3%. Price relief measures on indirect taxes implemented in 2020 are expected to lapse in the second quarter of 2021, generating a one-off effect on prices and temporarily affecting inflation excluding food and regulated items. However, indexation to low levels of past inflation, weak demand, and ample excess productive capacity are expected to keep core inflation below the target, near 2.3% at the end of 2021 (previously 2.1%). The reversion in 2021 of the effects of some price relief measures on utility rates from 2020 should lead to an increase in the CPI for regulated items in the second half of this year. Annual price changes are now expected to be higher than estimated in the January report due to an increased expected path for fuel prices and unanticipated increases in regulated education prices. The projection for the CPI for foods has increased compared to the previous report, taking into account certain factors that were not anticipated in January (a less favorable agricultural cycle, increased pressure from international prices, and transport costs). Given the above, year-end annual inflation for 2021 and 2022 is now expected to be 3% and 2.8%, respectively, which would be above projections from January (2.3% and 2,7%). For its part, expected inflation based on analyst surveys suggests year-end inflation in 2021 and 2022 of 2.8% and 3.1%, respectively. There remains significant uncertainty surrounding the inflation forecasts included in this report due to several factors: 1) the evolution of the pandemic; 2) the difficulty in evaluating the size and persistence of excess productive capacity; 3) the timing and manner in which price relief measures will lapse; and 4) the future behavior of food prices. Projected 2021 growth in foreign demand (4.4% to 5.2%) and the supposed average oil price (USD 53 to USD 61 per Brent benchmark barrel) were both revised upward. An increase in long-term international interest rates has been reflected in a depreciation of the peso and could result in relatively tighter external financial conditions for emerging market economies, including Colombia. Average growth among Colombia’s trade partners was greater than expected in the fourth quarter of 2020. This, together with a sizable fiscal stimulus approved in the United States and the onset of a massive global vaccination campaign, largely explains the projected increase in foreign demand growth in 2021. The resilience of the goods market in the face of global crisis and an expected normalization in international trade are additional factors. These considerations and the expected continuation of a gradual reduction of mobility restrictions abroad suggest that Colombia’s trade partners could grow on average by 5.2% in 2021 and around 3.4% in 2022. The improved prospects for global economic growth have led to an increase in current and expected oil prices. Production interruptions due to a heavy winter, reduced inventories, and increased supply restrictions instituted by producing countries have also contributed to the increase. Meanwhile, market forecasts and recent Federal Reserve pronouncements suggest that the benchmark interest rate in the U.S. will remain stable for the next two years. Nevertheless, a significant increase in public spending in the country has fostered expectations for greater growth and inflation, as well as increased uncertainty over the moment in which a normalization of monetary policy might begin. This has been reflected in an increase in long-term interest rates. In this context, emerging market economies in the region, including Colombia, have registered increases in sovereign risk premiums and long-term domestic interest rates, and a depreciation of local currencies against the dollar. Recent outbreaks of COVID-19 in several of these economies; limits on vaccine supply and the slow pace of immunization campaigns in some countries; a significant increase in public debt; and tensions between the United States and China, among other factors, all add to a high level of uncertainty surrounding interest rate spreads, external financing conditions, and the future performance of risk premiums. The impact that this environment could have on the exchange rate and on domestic financing conditions represent risks to the macroeconomic and monetary policy forecasts. Domestic financial conditions continue to favor recovery in economic activity. The transmission of reductions to the policy interest rate on credit rates has been significant. The banking portfolio continues to recover amid circumstances that have affected both the supply and demand for loans, and in which some credit risks have materialized. Preferential and ordinary commercial interest rates have fallen to a similar degree as the benchmark interest rate. As is generally the case, this transmission has come at a slower pace for consumer credit rates, and has been further delayed in the case of mortgage rates. Commercial credit levels stabilized above pre-pandemic levels in March, following an increase resulting from significant liquidity requirements for businesses in the second quarter of 2020. The consumer credit portfolio continued to recover and has now surpassed February 2020 levels, though overall growth in the portfolio remains low. At the same time, portfolio projections and default indicators have increased, and credit establishment earnings have come down. Despite this, credit disbursements continue to recover and solvency indicators remain well above regulatory minimums. 1.2 Monetary policy decision In its meetings in March and April the BDBR left the benchmark interest rate unchanged at 1.75%.

Banco de la República is celebrating its 100th anniversary in 2023. This is a very significant anniversary and one that provides an opportunity to highlight the contribution the Bank has made to the country’s development. Its track record as guarantor of monetary stability has established it as the one independent state institution that generates the greatest confidence among Colombians due to its transparency, management capabilities, and effective compliance with the central banking and cultural responsibilities entrusted to it by the Constitution and the Law. On a date as important as this, the Board of Directors of Banco de la República (BDBR) pays tribute to the generations of governors and officers whose commitment and dedication have contributed to the growth of this institution.1 Banco de la República’s mandate was confirmed in the National Constitutional Assembly of 1991 where the citizens had the opportunity to elect the seventy people who would have the task of drafting a new constitution. The leaders of the three political movements with the most votes were elected as chairs to the Assembly, and this tripartite presidency reflected the plurality and the need for consensus among the different political groups to move the reform forward. Among the issues considered, the National Constitutional Assembly gave special importance to monetary stability. That is why they decided to include central banking and to provide Banco de la República with the necessary autonomy to use the instruments for which they are responsible without interference from other authorities. The constituent members understood that ensuring price stability is a state duty and that the entity responsible for this task must be enshrined in the Constitution and have the technical capability and institutional autonomy necessary to adopt the decisions they deem appropriate to achieve this fundamental objective in coordination with the general economic policy. In particular, Article 373 established that “the State, through Banco de la República, shall ensure the maintenance of the purchasing power of the currency,” a provision that coincided with the central banking system adopted by countries that have been successful in controlling inflation. In 1999, in Ruling 481, the Constitutional Court stated that “the duty to maintain the purchasing power of the currency applies to not only the monetary, credit, and exchange authority, i.e., the Board of Banco de la República, but also those who have responsibilities in the formulation and implementation of the general economic policy of the country” and that “the basic constitutional purpose of Banco de la República is the protection of a sound currency. However, this authority must take the other economic objectives of state intervention such as full employment into consideration in their decisions since these functions must be coordinated with the general economic policy.” The reforms to Banco de la República agreed upon in the Constitutional Assembly of 1991 and in Act 31/1992 can be summarized in the following aspects: i) the Bank was assigned a specific mandate: to maintain the purchasing power of the currency in coordination with the general economic policy; ii) the BDBR was designatedas the monetary, foreign exchange, and credit authority; iii) the Bank and its Board of Directors were granted a significant degree of independence from the government; iv) the Bank was prohibited from granting credit to the private sector except in the case of the financial sector; v) established that in order to grant credit to the government, the unanimous vote of its Board of Directors was required except in the case of open market transactions; vi) determined that the legislature may, in no case, order credit quotas in favor of the State or individuals; vii) Congress was appointed, on behalf of society, as the main addressee of the Bank’s reporting exercise; and viii) the responsibility for inspection, surveillance, and control over Banco de la República was delegated to the President of the Republic. The members of the National Constitutional Assembly clearly understood that the benefits of low and stable inflation extend to the whole of society and contribute mto the smooth functioning of the economic system. Among the most important of these is that low inflation promotes the efficient use of productive resources by allowing relative prices to better guide the allocation of resources since this promotes economic growth and increases the welfare of the population. Likewise, low inflation reduces uncertainty about the expected return on investment and future asset prices. This increases the confidence of economic agents, facilitates long-term financing, and stimulates investment. Since the low-income population is unable to protect itself from inflation by diversifying its assets, and a high proportion of its income is concentrated in the purchase of food and other basic goods that are generally the most affected by inflationary shocks, low inflation avoids arbitrary redistribution of income and wealth.2 Moreover, low inflation facilitates wage negotiations, creates a good labor climate, and reduces the volatility of employment levels. Finally, low inflation helps to make the tax system more transparent and equitable by avoiding the distortions that inflation introduces into the value of assets and income that make up the tax base. From the monetary authority’s point of view, one of the most relevant benefits of low inflation is the credibility that economic agents acquire in inflation targeting, which turns it into an effective nominal anchor on price levels. Upon receiving its mandate, and using its autonomy, Banco de la República began to announce specific annual inflation targets as of 1992. Although the proposed inflation targets were not met precisely during this first stage, a downward trend in inflation was achieved that took it from 32.4% in 1990 to 16.7% in 1998. At that time, the exchange rate was kept within a band. This limited the effectiveness of monetary policy, which simultaneously sought to meet an inflation target and an exchange rate target. The Asian crisis spread to emerging economies and significantly affected the Colombian economy. The exchange rate came under strong pressure to depreciate as access to foreign financing was cut off under conditions of a high foreign imbalance. This, together with the lack of exchange rate flexibility, prevented a countercyclical monetary policy and led to a 4.2% contraction in GDP that year. In this context of economic slowdown, annual inflation fell to 9.2% at the end of 1999, thus falling below the 15% target set for that year. This episode fully revealed how costly it could be, in terms of economic activity, to have inflation and exchange rate targets simultaneously. Towards the end of 1999, Banco de la República announced the adoption of a new monetary policy regime called the Inflation Targeting Plan. This regime, known internationally as ‘Inflation Targeting,’ has been gaining increasing acceptance in developed countries, having been adopted in 1991 by New Zealand, Canada, and England, among others, and has achieved significant advances in the management of inflation without incurring costs in terms of economic activity. In Latin America, Brazil and Chile also adopted it in 1999. In the case of Colombia, the last remaining requirement to be fulfilled in order to adopt said policy was exchange rate flexibility. This was realized around September 1999, when the BDBR decided to abandon the exchange-rate bands to allow the exchange rate to be freely determined in the market.Consistent with the constitutional mandate, the fundamental objective of this new policy approach was “the achievement of an inflation target that contributes to maintaining output growth around its potential.”3 This potential capacity was understood as the GDP growth that the economy can obtain if it fully utilizes its productive resources. To meet this objective, monetary policy must of necessity play a countercyclical role in the economy. This is because when economic activity is below its potential and there are idle resources, the monetary authority can reduce the interest rate in the absence of inflationary pressure to stimulate the economy and, when output exceeds its potential capacity, raise it. This policy principle, which is immersed in the models for guiding the monetary policy stance, makes the following two objectives fully compatible in the medium term: meeting the inflation target and achieving a level of economic activity that is consistent with its productive capacity. To achieve this purpose, the inflation targeting system uses the money market interest rate (at which the central bank supplies primary liquidity to commercial banks) as the primary policy instrument. This replaced the quantity of money as an intermediate monetary policy target that Banco de la República, like several other central banks, had used for a long time. In the case of Colombia, the objective of the new monetary policy approach implied, in practical terms, that the recovery of the economy after the 1999 contraction should be achieved while complying with the decreasing inflation targets established by the BDBR. The accomplishment of this purpose was remarkable. In the first half of the first decade of the 2000s, economic activity recovered significantly and reached a growth rate of 6.8% in 2006. Meanwhile, inflation gradually declined in line with inflation targets. That was how the inflation rate went from 9.2% in 1999 to 4.5% in 2006, thus meeting the inflation target established for that year while GDP reached its potential level. After this balance was achieved in 2006, inflation rebounded to 5.7% in 2007, above the 4.0% target for that year due to the fact that the 7.5% GDP growth exceeded the potential capacity of the economy.4 After proving the effectiveness of the inflation targeting system in its first years of operation, this policy regime continued to consolidate as the BDBR and the technical staff gained experience in its management and state-of-the-art economic models were incorporated to diagnose the present and future state of the economy and to assess the persistence of inflation deviations and expectations with respect to the inflation target. Beginning in 2010, the BDBR established the long-term 3.0% annual inflation target, which remains in effect today. Lower inflation has contributed to making the macroeconomic environment more stable, and this has favored sustained economic growth, financial stability, capital market development, and the functioning of payment systems. As a result, reductions in the inflationary risk premia and lower TES and credit interest rates were achieved. At the same time, the duration of public domestic debt increased significantly going from 2.27 years in December 2002 to 5.86 years in December 2022, and financial deepening, measured as the level of the portfolio as a percentage of GDP, went from around 20% in the mid-1990s to values above 45% in recent years in a healthy context for credit institutions.Having been granted autonomy by the Constitution to fulfill the mandate of preserving the purchasing power of the currency, the tangible achievements made by Banco de la República in managing inflation together with the significant benefits derived from the process of bringing inflation to its long-term target, make the BDBR’s current challenge to return inflation to the 3.0% target even more demanding and pressing. As is well known, starting in 2021, and especially in 2022, inflation in Colombia once again became a serious economic problem with high welfare costs. The inflationary phenomenon has not been exclusive to Colombia and many other developed and emerging countries have seen their inflation rates move away from the targets proposed by their central banks.5 The reasons for this phenomenon have been analyzed in recent Reports to Congress, and this new edition delves deeper into the subject with updated information. The solid institutional and technical base that supports the inflation targeting approach under which the monetary policy strategy operates gives the BDBR the necessary elements to face this difficult challenge with confidence. In this regard, the BDBR reiterated its commitment to the 3.0% inflation target in its November 25 communiqué and expects it to be reached by the end of 2024.6 Monetary policy will continue to focus on meeting this objective while ensuring the sustainability of economic activity, as mandated by the Constitution. Analyst surveys done in March showed a significant increase (from 32.3% in January to 48.5% in March) in the percentage of responses placing inflation expectations two years or more ahead in a range between 3.0% and 4.0%. This is a clear indication of the recovery of credibility in the medium-term inflation target and is consistent with the BDBR’s announcement made in November 2022. The moderation of the upward trend in inflation seen in January, and especially in February, will help to reinforce this revision of inflation expectations and will help to meet the proposed targets. After reaching 5.6% at the end of 2021, inflation maintained an upward trend throughout 2022 due to inflationary pressures from both external sources, associated with the aftermath of the pandemic and the consequences of the war in Ukraine, and domestic sources, resulting from: strengthening of local demand; price indexation processes stimulated by the increase in inflation expectations; the impact on food production caused by the mid-2021 strike; and the pass-through of depreciation to prices. The 10% increase in the minimum wage in 2021 and the 16% increase in 2022, both of which exceeded the actual inflation and the increase in productivity, accentuated the indexation processes by establishing a high nominal adjustment benchmark. Thus, total inflation went to 13.1% by the end of 2022. The annual change in food prices, which went from 17.2% to 27.8% between those two years, was the most influential factor in the surge in the Consumer Price Index (CPI). Another segment that contributed significantly to price increases was regulated products, which saw the annual change go from 7.1% in December 2021 to 11.8% by the end of 2022. The measure of core inflation excluding food and regulated items, in turn, went from 2.5% to 9.5% between the end of 2021 and the end of 2022. The substantial increase in core inflation shows that inflationary pressure has spread to most of the items in the household basket, which is characteristic of inflationary processes with generalized price indexation as is the case in Colombia. Monetary policy began to react early to this inflationary pressure. Thus, starting with its September 2021 session, the BDBR began a progressive change in the monetary policy stance moving away from the historical low of a 1.75% policy rate that had intended to stimulate the recovery of the economy. This adjustment process continued without interruption throughout 2022 and into the beginning of 2023 when the monetary policy rate reached 12.75% last January, thus accumulating an increase of 11 percentage points (pp). The public and the markets have been surprised that inflation continued to rise despite significant interest rate increases. However, as the BDBR has explained in its various communiqués, monetary policy works with a lag. Just as in 2022 economic activity recovered to a level above the pre-pandemic level, driven, along with other factors, by the monetary stimulus granted during the pandemic period and subsequent months, so too the effects of the current restrictive monetary policy will gradually take effect. This will allow us to expect the inflation rate to converge to 3.0% by the end of 2024 as is the BDBR’s purpose.Inflation results for January and February of this year showed declining marginal increases (13 bp and 3 bp respectively) compared to the change seen in December (59 bp). This suggests that a turning point in the inflation trend is approaching. In other Latin American countries such as Chile, Brazil, Perú, and Mexico, inflation has peaked and has begun to decline slowly, albeit with some ups and downs. It is to be expected that a similar process will take place in Colombia in the coming months. The expected decline in inflation in 2023 will be due, along with other factors, to lower cost pressure from abroad as a result of the gradual normalization of supply chains, the overcoming of supply shocks caused by the weather, and road blockades in previous years. This will be reflected in lower adjustments in food prices, as has already been seen in the first two months of the year and, of course, the lagged effect of monetary policy. The process of inflation convergence to the target will be gradual and will extend beyond 2023. This process will be facilitated if devaluation pressure is reversed. To this end, it is essential to continue consolidating fiscal sustainability and avoid messages on different public policy fronts that generate uncertainty and distrust. 1 This Report to Congress includes Box 1, which summarizes the trajectory of Banco de la República over the past 100 years. In addition, under the Bank’s auspices, several books that delve into various aspects of the history of this institution have been published in recent years. See, for example: Historia del Banco de la República 1923-2015; Tres banqueros centrales; Junta Directiva del Banco de la República: grandes episodios en 30 años de historia; Banco de la República: 90 años de la banca central en Colombia. 2 This is why lower inflation has been reflected in a reduction of income inequality as measured by the Gini coefficient that went from 58.7 in 1998 to 51.3 in the year prior to the pandemic. 3 See Gómez Javier, Uribe José Darío, Vargas Hernando (2002). “The Implementation of Inflation Targeting in Colombia”. Borradores de Economía, No. 202, March, available at: https://repositorio.banrep.gov.co/handle/20.500.12134/5220 4 See López-Enciso Enrique A.; Vargas-Herrera Hernando and Rodríguez-Niño Norberto (2016). “The inflation targeting strategy in Colombia. An historical view.” Borradores de Economía, No. 952. https://repositorio.banrep.gov.co/handle/20.500.12134/6263 5 According to the IMF, the percentage change in consumer prices between 2021 and 2022 went from 3.1% to 7.3% for advanced economies, and from 5.9% to 9.9% for emerging market and developing economies. 6 https://www.banrep.gov.co/es/noticias/junta-directiva-banco-republica-reitera-meta-inflacion-3

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%.