Academic literature on the topic 'Private rental markets'

The residential real estate market has been segmented dichotomously into owners and renters. Given the various tenures and sub-markets of the renters, it is problematic to consider them as a homogeneous target market. Based on a thematic analysis of semi-structured interviews with 16 residential real estate executives, this paper establishes six distinct private rental target markets including: 1) hard-to-house occupants, 2) affordability renters, 3) workforce residents, 4) transitional millennials, 5) lifestyle residents, and 6) returners. This paper is unique and noteworthy as it combines the fragmented literature on private renters with insights from residential real estate executives to produce a spectrum of target markets. In addition to validating the previous literature, this paper presents new target markets and offers marketing value propositions for each of the identified groups

Rental markets hold an important role for a functioning housing market as a whole. Households with shorter time horizons, as well as households with little private equity and difficulties acquiring capital can see their housing needs met on the rental market. A functioning rental market does however require some sort of legislation. In this paper we argue that legislation must adapt to changing rental markets. We do so from the specific case of Iceland. The Icelandic rental market has, since the financial crisis, undergone noticeable structural change, evident from a number of perspectives. By applying a framework based in the role of rental market legislation, we provide a comparison between legislation in the Nordic countries. We conclude, based both in the presented structural change of the Icelandic rental market, and in aspects of Nordic rent legislation, that there is a case to be made for changes to the Icelandic legislation.

Purpose The purpose of this paper is to examine the market liquidity (time-on-market (TOM)) and its determinants, for rental dwellings in the largest seven German cities, with big data. Design/methodology/approach The determinants of TOM are estimated with the Cox proportional hazards model. Hedonic characteristics, as well as socioeconomic and spatial variables, are combined with different fixed effects and controls for non-linearity, so as to maximise the explanatory power of the model. Findings Higher asking rent and larger living space decrease the liquidity in all seven markets, while the age of a dwelling, the number of rooms and proximity to the city centre accelerate the letting process. For the other hedonic characteristics heterogeneous implications emerge. Practical implications The findings are of interest for institutional and private landlords, as well as governmental organisations in charge of housing and urban development. Originality/value This is the first paper to deal with the liquidity of rental dwellings in the seven most populated cities of Europe’s second largest rental market, by applying the Cox proportional hazards model with spatial gravity variables. Furthermore, the German rental market is of particular interest, as approximately 60 per cent of all rental dwellings are owned by private landlords and the German market is organised polycentrically.

Social Scientists and policy makers need precise data on market rents. Yet, while housing prices are systematically recorded, few accurate data sets on rents are available. In this paper, we present a new data set describing local rental markets in France based on online ads collected through to webscraping. Comparison with alternate sources reveals that online ads provide a non biased picture of rental markets and allow coverage of the whole territory. We then estimate hedonic models for prices and rents and document the spatial variations in rent-price ratios. We show that rents do not increase as much as prices in the tightest housing markets. We use our dataset to estimate the market rent of each transaction and of social dwellings. In the latter case,this allows us to estimate the in-kind benefit received by social tenants which is mainly driven by the level of private rent in their municipality.

Informal rental housing remains a hidden – yet central – pillar of low-cost shelter markets across the global South. The large informal settlement of Mathare Valley illustrates Nairobi’s rapidly changing informal rental housing markets, with the ongoing rise of tenements alongside metal shacks. Informal single-room rental units (shacks and tenements) already house most Nairobi residents in low-quality but highly profitable shelter. This case study describes how multiple exclusions can shape access to rental housing and examines the politics of shelter delivery. We underscore the importance of private rental markets and offer recommendations for inclusive, multi-pronged interventions combining support for rental housing, land governance and infrastructure delivery. Through a better understanding of the myriad actors and dynamics of informal rental housing, it may be possible to develop strategies that serve low-income tenants for whom renting is often the only viable option.

AbstractCoase originally formulated his conjecture about intertemporal price competition in an example of land monopoly, but it has been applied almost exclusively to non-spatial markets. This paper revisits the Coase conjecture and compares four institutional arrangements based on the combination of land tenure options and local governance forms: private/rental, public/rental, private/owner, and public/owner. The two-period model developed in this paper shows that homeownership may result in more land development than leasehold. Numeric examples suggest (1) public/owner is efficient for uniform distribution of consumer; (2) rentals can be desirable for ‘poor’ communities; (3) private/owner is more efficient for ‘rich’ communities; (4) restrictive zoning reduces social surplus. These results can help explain why public institutions are dominant in the urban area and why most private communities are small, located in the suburbs, and for middle-upper class.

Many countries have undergone a broad retreat from the use of indirect (supply) subsidies to meet low-income housing-affordability problems, shifting to direct subsidies often linked to means-tested income-maintenance systems. Although the reasons for this change of direction are well documented, the efficacy of direct housing subsidies in terms of tackling affordability remains in question. The authors examine in detail one such system, Australia's Rent Assistance (RA) programme, making use of a microsimulation model of the Australian housing market linked to a model of the social security system. It is found that there is considerable targeting error because many low-income renters are ineligible for direct subsidies. It is also found that RA is relatively ineffective in overcoming affordability problems in high housing cost areas of Australia. Although RA does not of itself contribute much to poverty-trap problems, it may deter unemployed households from moving to areas where job vacancies exist. The authors conclude that future comparative work could usefully analyse the distributional and behavioural impacts of different forms of housing allowances. Moreover, alternative policies could be recalibrated within the microsimulation model in order to examine the first-round impacts of policy design change.

This study analyzed the factors affecting the actual residence period of tenants using limited data, based on the recognition that the supply of private rental housing can play an important role in establishing housing stability for the middle-income class. The most important result confirmed by the empirical analysis is that the larger the amount of Jeonse-Deposit, which can be understood as the size of total housing services, the longer the period of residence becomes in the private rental housing markets. From the perspective of private rental housing management, it is understood that an increase in the total rental fee (Jeonse-Deposit) will help bring stability to management because it means an increase in sales volume as far as other conditions are the same. On the other hand, among the same size of total rental fee (Jeonse-Deposit), the higher the proportion of the monthly rent is, the shorter the residence period becomes. The size of the deposit and monthly rent are both related to the creditworthiness of the lessor and the lessee, so it is very important to properly adjust the proportion of monthly rent and deposit. Results of the empirical analysis also show that corporate tenants have longer tenancy than individual tenants, and that as the size of private rental housing increases, the tenancy period decreases.

Mestrado em Gestão e Avaliação Imobiliária
O financiamento das operações de reabilitação urbana e a atracção de investimento privado surgem como questões centrais do desenvolvimento de uma verdadeira política de reabilitação urbana. O objectivo desta dissertação consiste em analisar o comportamento do investidor privado na reabilitação urbana da cidade de Lisboa, segmento residencial, e identificar os factores críticos para incentivar o investimento privado em reabilitação. O núcleo do estudo consiste na análise dos resultados de entrevistas a dois grupos: um primeiro grupo constituído por investidores imobiliários e um segundo grupo composto por outros stakeholders do sector imobiliário. Os resultados das entrevistas confirmam os estudos efectuados por Adair et Al (1998) no Reino Unido, concluindo que os principais motivos para investir em projectos habitacionais de reabilitação urbana são factores de mercado relacionados com a rentabilidade e risco. Os factores críticos para aumentar o volume de investimento em reabilitação urbana consistem na existência de medidas de minimização do risco, nomeadamente celeridade e clareza do processo e das regras de licenciamento, alterações profundas no regime de arrendamento urbano, incentivos fiscais e estabelecimento de parcerias público-privadas. Em suma, confirma-se que a estratégia de reabilitação urbana necessita de uma abordagem holística, participada, orientada para o mercado. O papel chave do sector público na reabilitação urbana é criar um ambiente favorável ao investimento privado.
The financing of urban rehabilitation and attraction of private investment are major issues in the development of a successful urban regeneration policy. This work consists of analyzing the behavior of private investors in the urban rehabilitation process of the city of Lisbon, residential segment, and identifying the key success factors to foster private investment into rehabilitation initiatives. The central core of the study analyses the conclusions of two surveys: one to a group of private investors in urban rehabilitation and another to a group of other stakeholders of the real estate market. The findings confirm the studies of Adair et Al (1998) for the UK market indicating that motives for investing in residential urban regeneration projects are market-based factors related to return and risk. Key success factors to foster private investment into rehabilitation initiatives encompass measures to minimize the associated risk, namely celerity and clarity in the licensing process and rules, reform of rental laws, tax incentives, and public-private partnerships. The urban rehabilitation policy should have and holistic approach, participated and market-oriented. The key role of the public sector in urban rehabilitation is to create a favorable environment to private investment.

Mestrado em Gestão e Avaliação Imobiliária
O objetivo do presente estudo é construir um índice imobiliário com base no valor observado das rendas de apartamentos localizados no concelho de Lisboa, no período de 1991 a 2011, e pertencentes a uma carteira de um investidor institucional nacional. Da revisão da literatura resultou a seleção de Modelos Hedónicos e de Vendas (Rendas) Repetidas, para, através do método quantitativo, proceder à construção do índice imobiliário. Foi construído um único Modelo de Vendas Repetidas e 15 Modelos Hedónicos em que a variável dependente era a Renda ou a Renda por m2 de Área Bruta Privativa. Os Modelos Hedónicos, na sua versão mais completa, consideraram como variáveis independentes, atributos tais como Área Bruta Privativa (em m2), Tipologia (T0, T1, T2, T3, T4 e T5 ou superior), Localização (simulada através do Coeficiente de Localização do SIGIMI), Idade (em anos, contados em 2011), Ano de Celebração do Contrato de Arrendamento e Obras de Beneficiação no período 1991-2011 (estado de conservação). Foi eleito para a quantificação do Índice de Preços de Arrendamento Residencial na Cidade de Lisboa, o Modelo Hedónico com Renda como variável dependente e apenas com 3 variáveis independentes (Área Bruta Privativa, Localização e Idade). O índice imobiliário foi comparado com o Índice de Atualização das Rendas, o Índice de Preços da Habitação (componente da valorização dos imóveis) e outros indicadores macroeconómicos tais como o Índice de Preços no Consumidor e Produto Interno Bruto. A rendibilidade global do imobiliário foi igualmente comparada com a rendibilidade de investimentos alternativos em ações e obrigações.
The aim of this study is to construct an index based on real estate value observed rents for apartments located in the municipality of Lisbon, in the period from 1991 to 2011, and a wallet belonging to a national institutional investor. The literature review resulted in the selection of Hedonic Models and Repeated Sales (Income) Models, for through the quantitative method, proceed to the construction of real estate index. We built a single Repeated Sales Model and 15 Hedonic Models in which the dependent variable was the Income or Income per m2 of Gross Private Area. Hedonic Models, in its most complete version, considered as independent variables, attributes such as Private Gross Area (m2), Bedrooms (T0, T1, T2, T3, T4 and T5 or more), Location (simulated by the SIGIMI Location Coefficient), Age (in years as in 2011), Year Celebration of the Rent Agreement and Improvement Works in the period 1991-2011 (condition). We elected to the quantification Rent Housing Price Index in the City of Lisbon, the Hedonic Model with Income as the dependent variable and with only three independent variables (Gross Private Area, Location and Age). The real estate index was compared with the Index of Income Update, the Housing Price Index (real estate value component) and other macroeconomic indicators such as the Consumer Price Index and Gross Domestic Product. The overall profitability of real estate was also compared with the profitability of alternative investments in stocks and bonds.

History
M.A.
This thesis discusses the Old Philadelphia Development Corporation (OPDC), a public-private redevelopment agency, and its work in the 1950s, 1960s, and 1970s promoting the redevelopment of several areas and neighborhoods located in the Center City district of downtown Philadelphia. Leading up to and during its involvement in the planning of the Market Street East (formerly, East Market Street) and The Gallery mall projects, the OPDC imposed on its ventures a set myths about the city's place within the American legend, Market Street's history as a majestic shopping corridor, and the centrality of Philadelphia's downtown to the metropolitan region. It did so as a means for controlling various aspects of Center City urban renewal and for bringing suburbanites back downtown to shop and enjoy leisure time. This thesis argues that although these myths remembered East Market Street as the domain of middle class and affluent whites, the OPDC ignored the realities of changing metropolitan economic, cultural, and population trends in favor of adherence to its self-created narrative, leading the corporation and its redevelopment cohort to make many miscalculations and missteps in its attempts to revitalize the area.
Temple University--Theses

Avyttringen och ombildningen av kommunala och privata bostadshyresfastigheter till bostadsrättsföreningar har blivit ett allt vanligare fenomen under de senaste decennierna. Främst sker avyttringen i Stockholms kommun. Syftet med denna uppsats är att mäta om prissättningen vid utförsäljning av bostadshyresfastigheter inom Stockholms kommun skiljer sig beroende på om säljaren varit privat eller ett allmännyttigt kommunalt bolag. För att undersöka detta har olika regressionsmodeller applicerats på data över fastighetsprisregistret under två mandatperioder. Resultatet visar en tydlig prisskillnad mellan kommunala avyttringar och privata inom samma områdesindelning. Skillnaden i prissättning innebär att kommunala fastighetsbolag har realiserat ut och omfördelat skattebetalarnas pengar, till ett värde som kan uppgå till så mycket som 3,23 miljarder kronor räknat i 2010 års penningvärde. Sannolikt är en sådan förmögenhetsomfördelning inte samhällsekonomisk effektiv. Vidare torde den motverka syftet med hyreslagsstiftningen.
In the Swedish market for multi-family housing, investment properties are often sold to the tenants who thus convert the property into co-operative housing. This is particularly true in attractive housing location where the existing rent control is in practice binding for all residential rental units. It is somewhat less self-evident that multi-family properties owned by the municipality (not-for-profit, council housing) would also be subject to such conversions. This is, however, quite common, particularly in Stockholm. The aim of this paper is to estimate whether council housing is generally sold to the tenants with a discount, as compared to the market prices of transactions where private property companies sell their properties. We use regression techniques applied to data from the official record of real property transactions. We find a significant price difference between the two categories of transactions. Council housing is sold out at a discount price and we estimate that a total value of some 3.23 billion SEK may have been redistributed from the taxpayers to the housing purchasers in these transactions. This program is probably not efficient from a public economic perspective. Furthermore, it counteracts the purpose of the current rent control legislation.

This dissertation consists of five studies presented in seven essays. The overall objectives are to investigate the extent and consequences of competition on the rental housing market as well as the importance of national government policies for the substitute good, i.e. owner-occupied housing. However, each essay also has specific objectives. Due to the characteristics of the housing market, one should not expect competition to be very fierce. The market characteristics are, for instance, capital-intensive, complicated and time-consuming construction processes as well as a limited supply of land in many areas. In fact, firms have a lot to gain from colluding and to avoid e.g. price wars. It is therefore theoretically more likely that housing companies will engage in “functional” or “strategic” competition such as the quality of housing services. Essay I and IV analyze the unique municipal housing market in Sweden where apartment rents are determined by negotiations between the local municipal company and the local Union of Tenants. A regression analysis is applied on data from 30 municipalities. There was a strong correlation between apartment rents at local municipal markets and the level of “external” competition (measured by the price level on the market for single-family owner occupied housing), but not with “internal” competition (measured by the market share of the municipal housing company) or the capital expenditure of the municipal housing company (presumed to reflect historical construction and renovation costs for the apartments). The dissertation also investigates the consequences on rents (essay II) and on the quality of housing services (essay III) from a local Swedish municipal housing company selling a substantial part of its apartment stock (15-40 percent) and thereby theoretically creating more competition. These essays use a quasi-experimental methodology whereby the development of the housing market in a privatization town is compared with the development in a very similar comparison town. It is found that privatization has lead to lower rents in the short- and medium-term in six out of seven privatization towns. The development of the quality of housing services was more related to the performance of each individual company and not a specific category of companies. In essay V, these results are merged and developed further. Essay VI presents a wide range of policies available for governments wishing to increase access to home ownership for low-income households and thereby increasing the pressure on rental housing companies to reduce rents. A systematic overview of policies is provided based on the four distinct time periods of a typical ‘housing career’ of a household; i.e. down payment accumulation stage, transaction stage, ownership stage and selling stage. It is found that many policies are required to meet the specific and differing needs of households for governments wishing to encourage home ownership. Essay VII describes that home ownership rates have increased in almost all industrialized countries during the period from World War II until mid-1990s. The essay analyses the implications of government policies and some other factors (e.g. national wealth, income distribution) on home ownership rates in 13 industrialized countries during the period 1970﷓2000. A fixed-effect model is applied on a panel data set. The most important result is that a statistically significant and positive correlation between government support and home ownership rates was found although this is only a preliminary conclusion since data was scarce.
Avhandlingen består av fem studier presenterade i sju essäer. Den övergripande målsättningenär att undersöka konkurrensens omfattning och effekter på bostadshyresmarknaden samtbetydelsen av statliga stödsystem för substitutvaran till hyresbostäder, nämligen olika formerför bostadsägande. Varje essä har också specifika målsättningar.Inledningsvis så bör man inte förvänta sig omfattande konkurrens på bostadshyresmarknadenpga dess särdrag, exempelvis så är byggprocessen kapitalintensiv, kompliceradoch långsam och tillgången på mark är ytterst begränsad på flera delmarknader. I själva verketså har företagen mycket att vinna från att samarbeta och undvika tex priskrig. Teoretiskt så ärdet därför mer sannolikt att bostadsföretag ägnar sig åt ”funktionell” eller ”strategisk” konkurrenssom exempelvis kvaliteten på bostadstjänster.Essä I och IV analyserar konkurrensen på den unika svenska hyresmarknaden där bostadshyrorsätts i förhandlingar mellan det lokala allmännyttiga bostadsföretaget och hyresgästföreningen.Data från 30 kommuner analyseras med hjälp av regressionsanalys. Resultatetvisade en stark korrelation mellan hyresnivån i allmännyttans bostadsbestånd på kommunnivåoch ”extern” konkurrens från liknande ’produkter’ (motsvarande prisnivån på egnahem), meninte med ”intern” konkurrens från andra bostadsföretag (motsvarande allmännyttans marknadsandel)eller allmännyttans kapitalkostnader (som antas främst motsvara byggkostnadernaför lägenheterna).Avhandlingen undersöker även konsekvenserna på hyra (essä II) och kvalitet (essä III) frånen försäljning av en omfattande del (15-40%) av en allmännyttas bostadsbestånd. Teoretisktskapar detta mer konkurrens. Dessa essäer använder sig av en kvasi-experimentell metodikvarvid utvecklingen på en konkurrensutsatt bostadsmarknad i en tätort jämförs med utvecklingeni en annan snarlik tätort. Det visade sig att hyresnivån i sex av sju konkurrensutsattatätorter hade sjunkit på kort och medellång sikt. Däremot visade sig kvalitetsnivån främstvara beroende på den enskilda hyresvärden och inte på hyresvärdens kategori (privat ellerkommunal). Essä V slår samman dessa resultat och utvecklar materialet ytterligare.Essä VI diskuterar ett stort antal medel (eng ’policies’) för en statsmakt som önskar attgöra ägande av bostaden mer tillgängligt för låginkomstgrupper och därigenom bl a ökapressen på hyrorna på bostadsmarknaden. Medlen är systematiskt beskrivna i enlighet med defyra distinkta tidsperioderna för en ’typisk’ bostadskarriär; nämligen stadiet när kontantinsatseninsparas, överlåtelsestadiet, ägandestadiet och försäljningsstadiet. Studien visade attdet troligen behövs ett flertal medel för att möta hushållens specifika och skilda behov omman avser att uppmuntra hemägande.Essä VII beskriver att andelen som äger sin bostad har ökat i nästan samtliga industriländerfrån andra världskriget fram till mitten av 1990-talet. Essän analyserar konsekvenserna avmyndighetsstöd och flera andra faktorer (tex BNP-utveckling, inkomstfördelning) för andelenhushåll som äger sin bostad i 13 industriländer under perioden 1970-2000. En fix-effektmodell appliceras på ett paneldataset. Det främsta resultatet var att det fanns en statistisktsignifikant och positiv korrelation mellan andelen som äger sin bostad och omfattningen påmyndigheternas stöd. Resultatet är dock endast preliminärt då tillgången på data varbegränsad.
QC 20100831

The context of this study is a Housing Market Renewal project (HMR) in a South Asian lowincome home-owning community, in a small town in northern England. Its focus is an investigation into perceived inequalities and discriminatory practices in a previously neglected domain. The field work primarily entailed an ethnographic approach and repeated interviews with residents. The study has applied a multi-methodological approach in order to reconceptualize housing-related inequalities and discriminatory practices: realist/contextualist, hermeneutic, and post-structuralist approaches and methods of analysis are deployed. The empirical data fills the epistemological gap that has been identified by academics regarding residents' experiences of dwelling and gives unprecedented voice to those residents who have lived through the experience of HMR. The results of the study indicate that the cultural dynamics of communities are more complex than has hitherto been recognized in the HMR literature which relies on quantitative data sets. From the study results a hypothesis is constructed: the early stages of the community engagement process instigate the conflict and re-configure the community dynamics. The multi-methodological approach reveals how complex is the functioning of the reproductive processes of housing related discrimination. It also identifies complexity in the cycle of disengagement from the regeneration processes. The theory building approach, entailing the application of post structural analysis to the empirical data, has advanced the theoretical understanding of the processes and inhumane consequences of discrimination practices which constrain minority groups from practicing their cultural specific housing needs. The study has developed a dialogical framework to be used by practitioners, in recognition of the complexity of building conceptions of equality into the planning of housing renewal developments. It is recommended that more sophisticated frameworks are developed to improve policies and practices for putting in place culturally sensitive housing provision and addressing the mechanisms of discrimination. Additionally, it is recommended that an ethical framework should be drawn up and agreed by academics working in this field, to address the urgent need for standards of methodological pluralism and rigour in both research design and practice.

Mestrado em Gestão e Avaliação Imobiliária
O mercado imobiliário Europeu enfrenta grandes desafios impostos não só pelo setor bancário e as suas dificuldades de liquidez mas também pela fraca performance económica dos países da zona euro. O mercado residencial está no centro deste problema económico e regista um excesso de oferta bem como uma deslocação significativa da procura para o mercado de arrendamento. Este constrangimento sectorial constitui ao mesmo tempo uma oportunidade para a entrada de novos investidores no mercado, na perspectiva de aquisição para arrendamento. Para muitos investidores internacionais a Europa é entendida como um Mercado apetecível tendo em conta as oportunidades decorrentes dos ajustamentos de preços. Assim, afigura-se-nos da maior relevância um estudo sobre o nível de competitividade do mercado de arrendamento de português num contexto Europeu. O presente trabalho tem como objetivo estudar os sistemas ranking para suporte à decisão na avaliação do risco de investimento e medir o nível de atractividade que lhes confere . Os sistemas de rankings e ratings têm sido utilizados por profissionais em todo o mundo como facilitadores da tomada de decisão, sendo de aplicação diversa em diferentes setores da economia. O objetivo deste trabalho consiste, em primeiro lugar, analisar a metodologia que permite a construção de um ranking como ferramenta de suporte à decisão e, em segundo lugar, desenvolver um estudo empírico utilizando a metodologia Analytical Hierarchy Process para avaliar a competitividade de Portugal no mercado de arrendamento ao nível Europeu.
The European real estate market faces enormous challenges driven by the banking sector and countries inability to generate wealth. The residential sector is challenged with an oversupply of houses and a shift towards the private rental sector. This constraint constitutes an opportunity for buy-to-let investors to enter the market therefore, as Europe can be seen as a destination market on its own, the assessment of countries competitiveness in the private rental sector becomes a relevant essay. The present work aims to study the ranking systems as a decision-framework to assess property investment risk. Rankings and ratings have been widely used by professionals around the world to facilitate judgments and support decisions, and have a wide application to different economic sectors. The purpose of this paper is, first of all, to study the ranking methodology as a decision-framework that allows investors and property professionals to understand the problem and, secondly, to develop an empirical-study using the Analytical Hierarchy Process methodology to measure Portugal property rental sector competitiveness in an European context.

Orientador: Claudio Salvadori Dedecca
Dissertação (mestrado) - Universidade Estadual de Campinas, Instituto de Economia
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Resumo: Este trabalho tem por objetivo explicitar a correlação entre o mercado de trabalho privado não-agrícola e as condições de financiamento do Regime Geral da Previdência Social (RGPS). É possível provar que a evolução do desequilíbrio entre a arrecadação sobre folha salarial e o gasto com benefícios pagos aos trabalhadores do setor privado foi fortemente determinada pelas modificações ocorridas no mundo do trabalho ao longo dos anos 1990 e início dos anos 2000. Observa-se que a base mais importante de contribuição para o Orçamento da Seguridade Social, o mercado de trabalho, vem sendo corroída ao longo dos anos 1990 e início dos anos 2000. Essa corrosão teve como principais causas, não a diminuição relativa do número de ocupados contribuintes para a previdência entre 1995 e 2005, mas sim a queda real dos rendimentos do trabalho e a inserção de pessoas economicamente ativas em postos de trabalho pior remunerados do que antigamente
Abstract: This study has as objective to demonstrate the correlation between the private non-agricultural labour market and the financing conditions of the Regime Geral da Previdência Social (RGPS). It is possible to prove that the evolution of the disequilibrium between the sum of contributions based on wages and the expenditure with benefits to the private sector workers was strongly determined by the changes in the labour market throughout the 1990?s and the beginning of 2000?s. The most important base of contribution for the Social Security Budget, the labour market, has been corroded. This corrosion had as main causes not the relative reduction of the number of contributors for the pension funds between 1995 and 2005, but mainly the real fall of the labour income and the worse remunerated insertion of economically active people in these years
Mestrado
Economia Social e do Trabalho
Mestre em Desenvolvimento Econômico

AbstractPrivate wealth is comprised in part of capitalized future land rents. The Golden Rule of Accumulation is preserved even if we introduce land into our meta-model. Urban land is far more valuable than agricultural land. The risk tied to land leads to a reduction in its value in the form of a “risk premium” α > 0. Land rents can be taxed without any possibility of the tax being passed on to tenants and without loss of efficiency. If the tax is offset by a reduction in income tax, their taxation can even give rise to efficiency gains and positive distributive effects. The possibility of government intervention in the residential rental market represents a further risk for landowners. The sensitivity of the value of land to changes in the interest rate and hence the risk premium α rise with falling interest rates. In light of these many different risks, land as investment can only to a limited extent be a substitute for government bonds and hence for increasing private wealth by way of public debt. We calculate the value of land as asset category in the OECD plus China region. To this end, we primarily rely on data from statistical offices that provide figures for land in their national balance sheets. Our calculations show that the value of land in the countries of the OECD plus China region is about twice annual consumption in the region.

This Chapter details how the Irish housing systems, and housing systems across the world, are experiencing a structural ‘shock’. We are in the midst of an unprecedented housing and homelessness crisis. This details the dramatic increase in housing inequalities and exclusion, from the rise in homelessness, mortgage arrears and foreclosures, to the collapse in home-ownership rates and, in particular, the emergence of ‘Generation Rent’ and ‘Generation Stuck at Home’. This new Generation Rent is being locked out of traditional routes to affordable secure housing such as home ownership, social housing and secure low-rent housing. They are being pushed into private rental markets with unaffordable high rents and insecurity of tenure, or forced into hidden homelessness, couchsurfing, sleeping in cars, or pushed back to live with their parents. Ireland has had the largest fall in home ownership rates among European Union (EU) countries in the past three decades. This chapter shows that the current housing situation and crisis is not a temporary blip, but a deep and profound structural crisis that is in danger of becoming a permanent crisis. Our national and global housing systems are in crisis and this is a key juncture.

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.

Resilience is understood as the capacity of rural systems to transform and adapt, and this is key to achieving sustainable rural development. The aim of the research is to study resilience from a cooperative framework based on four concepts: persistence, adaptability, transformation capacity, and learning, and to collect successful strategies that encourage resilience. The research is part of a project called Rethink funded by the European Commission and state agencies of 14 European countries, included in the Seventh Framework Programme (FP7) and the ERA-NET RURAGRI. The methodology is structured based on a common analytical framework that holds the four concepts of resilience applied to each of the key stakeholders (cooperative, public sector, private sector and civil society). The case study analyzed is a cooperative that has more than 25 years’ experience in agriculture during which it has demonstrated its capacity for renewal and recovery through its working model. The analysis covers the entire process of the cooperative, from previous experience of farmers, the creation of the company in 2007 to its current projects, focusing not only on market strategies, but also on its strategic vision and research investment, and on values such as trust and respect, on which the cooperative is based.

Housing and transportation has become a pair of factors when it comes to decision of buying a house for the middle-income. This particular group of society is unique as they are aspired to luxury yet with limited affordability, particularly in the developing countries such as Indonesia. In many cases, housing estates are built in the form similar to gated community. Built in the suburban when usually the new housing estates are located quite in far distance to facilities, the residents are forced to own private vehicle(s) to conduct their daily activities. This situation shows the tendency of automobile dependence (Newman & Kenworthy, 1996; 1999). It has also been reflected in the vehicle ownership statistics figures and the notorious traffic congestion of Indonesian cities. The middle-income housing and their gated community has not only impacted their own travel pattern but also the residents living in kampung adjacent to their housing estate. Kampung dwellers have also reflected the middle-income characteristics with their lifestyle and automobile dependence. It has become eminent in suburban Bandung where pockets of kampung are found to be hidden amidst the housing estates whilst cars are parked on the roadsides. This is problematic in terms of affordability where they cannot really afford to own a car or motorbike as well as to rent a parking space since they usually live in small houses at kampung. To understand the above phenomenon, this paper tries to explore the extent of automobile dependency of the residents living at housing estate and its adjacent kampung at three locations. Data collected from questionnaires and group interviews are descriptively analysed. Results have shown that most residents travel in far distance to reach their job location but do not travel in far distance to conduct their shopping, studying, and exercise activities though some of them own a motorbike. The latter is due to the presence of mobile green grocers, warung, traditional markets, good quality schools, sport facilities and open spaces within walking distance to their houses. However, these nearby facilities are regularly visited mostly because the residents can travel within shorter distance through access points made available for public use. These access points help to create a network of alleys and streets connecting kampung and these facilities through the housing estates. When these access points are restricted or non-existed, the travel pattern would differ as has been uttered by the kampung dwellers. In one of the cases, the following disconnections between the kampung alleys and streets of housing estates have made the kampung dwellers altered either the location or the transportation mode of their activities. There are lessons to be learned from these travel patterns. Housing estate development shall always have access to the kampung that have existed and vice versa. Such spatial connections may contribute to a change of travel behaviour from automobile dependence to active travel. However, it should be kept in mind that these results may not be generally applicable to other places with different socio-economic and spatial characters. Further work in the field may be benefited from more cases and larger population sample.

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%.

Macroeconomic summary Annual inflation continued to rise in the first quarter (8.5%) and again outpaced both market expectations and the technical staff’s projections. Inflation in major consumer price index (CPI) baskets has accelerated year-to-date, rising in March at an annual rate above 3%. Food prices (25.4%) continued to contribute most to rising inflation, mainly affected by a deterioration in external supply and rising costs of agricultural inputs. Increases in transportation prices and in some utility rates (energy and gas) can explain the acceleration in regulated items prices (8.3%). For its part, the increase in inflation excluding food and regulated items (4.5%) would be the result of shocks in supply and external costs that have been more persistent than expected, the effects of indexation, accumulated inflationary pressures from the exchange rate, and a faster-than-anticipated tightening of excess productive capacity. Within the basket excluding food and regulated items, external inflationary pressures have meaningfully impacted on goods prices (6.4%), which have been accelerating since the last quarter of 2021. Annual growth in services prices (3.8%) above the target rate is due primarily to food away from home (14.1%), which was affected by significant increases in food and utilities prices and by a rise in the legal monthly minimum wage. Housing rentals and other services prices also increased, though at rates below 3%. Forecast and expected inflation have increased and remain above the target rate, partly due to external pressures (prices and costs) that have been more persistent than projected in the January report (Graphs 1.1 and 1.2). Russia’s invasion of Ukraine accentuated inflationary pressures, particularly on international prices for certain agricultural goods and inputs, energy, and oil. The current inflation projection assumes international food prices will increase through the middle of this year, then remain high and relatively stable for the remainder of 2022. Recovery in the perishable food supply is forecast to be less dynamic than previously anticipated due to high agricultural input prices. Oil prices should begin to recede starting in the second half of the year, but from higher levels than those presented in the previous report. Given the above, higher forecast inflation could accentuate indexation effects and increase inflation expectations. The reversion of a rebate on value-added tax (VAT) applied to cleaning and hygiene products, alongside the end of Colombia’s COVID-19 health emergency, could increase the prices of those goods. The elimination of excess productive capacity on the forecast horizon, with an output gap close to zero and somewhat higher than projected in January, is another factor to consider. As a consequence, annual inflation is expected to remain at high levels through June. Inflation should then decline, though at a slower pace than projected in the previous report. The adjustment process of the monetary policy rate wouldcontribute to pushing inflation and its expectations toward the target on the forecast horizon. Year-end inflation for 2022 is expected to be around 7.1%, declining to 4.8% in 2023. Economic activity again outperformed expectations. The technical staff’s growth forecast for 2022 has been revised upward from 4.3% to 5% (Graph 1.3). Output increased more than expected in annual terms in the fourth quarter of 2021 (10.7%), driven by domestic demand that came primarily because of private consumption above pre-pandemic levels. Investment also registered a significant recovery without returning to 2019 levels and with mixed performance by component. The trade deficit increased, with significant growth in imports similar to that for exports. The economic tracking indicator (ISE) for January and February suggested that firstquarter output would be higher than previously expected and that the positive demand shock observed at the end of 2021 could be fading slower than anticipated. Imports in consumer goods, retail sales figures, real restaurant and hotel income, and credit card purchases suggest that household spending continues to be dynamic, with levels similar to those registered at the end of 2021. Project launch and housing starts figures and capital goods import data suggest that investment also continues to recover but would remain below pre-pandemic levels. Consumption growth is expected to decelerate over the year from high levels reached over the last two quarters. This would come amid tighter domestic and external financial conditions, the exhaustion of suppressed demand, and a deterioration of available household income due to increased inflation. Investment is expected to continue to recover, while the trade deficit should tighten alongside high oil and other export commodity prices. Given all of the above, first-quarter economic growth is now expected to be 7.2% (previously 5.2%) and 5.0% for 2022 as a whole (previously 4.3%). Output growth would continue to moderate in 2023 (2.9%, previously 3.1%), converging similar to long-term rates. The technical staff’s revised projections suggest that the output gap would remain at levels close to zero on the forecast horizon but be tighter than forecast in January (Graph 1.4). These estimates continue to be affected by significant uncertainty associated with geopolitical tensions, external financial conditions, Colombia’s electoral cycle, and the COVID-19 pandemic. External demand is now projected to grow at a slower pace than previously expected amid increased global inflationary pressures, high oil prices, and tighter international financial conditions than forecast in January. The Russian invasion of Ukraine and its inflationary effects on prices for oil and certain agricultural goods and inputs accentuated existing global inflationary pressures originating in supply restrictions and increased international costs. A decline in the supply of Russian oil, low inventory levels, and continued production limits on behalf of the Organization of Petroleum Exporting Countries and its allies (OPEC+) can explain increased projected oil prices for 2022 (USD 100.8/barrel, previously USD 75.3) and 2023 (USD 86.8/barrel, previously USD 71.2). The forecast trajectory for the U.S. Federal Reserve (Fed) interest rate has increased for this and next year to reflect higher real and expected inflation and positive performance in the labormarket and economic activity. The normalization of monetary policy in various developed and emerging market economies, more persistent supply and cost shocks, and outbreaks of COVID-19 in some Asian countries contributed to a reduction in the average growth outlook for Colombia’s trade partners for 2022 (2.8%, previously 3.3%) and 2023 (2.4%, previously 2.6%). In this context, the projected path for Colombia’s risk premium increased, partly due to increased geopolitical global tensions, less expansionary monetary policy in the United States, an increase in perceived risk for emerging markets, and domestic factors such as accumulated macroeconomic imbalances and political uncertainty. Given all the above, external financial conditions are tighter than projected in January report. External forecasts and their impact on Colombia’s macroeconomic scenario continue to be affected by considerable uncertainty, given the unpredictability of both the conflict between Russia and Ukraine and the pandemic. The current macroeconomic scenario, characterized by high real inflation levels, forecast and expected inflation above 3%, and an output gap close to zero, suggests an increased risk of inflation expectations becoming unanchored. This scenario offers very limited space for expansionary monetary policy. Domestic demand has been more dynamic than projected in the January report and excess productive capacity would have tightened more quickly than anticipated. Headline and core inflation rose above expectations, reflecting more persistent and important external shocks on supply and costs. The Russian invasion of Ukraine accentuated supply restrictions and pressures on international costs. This partly explains the increase in the inflation forecast trajectory to levels above the target in the next two years. Inflation expectations increased again and are above 3%. All of this increased the risk of inflation expectations becoming unanchored and could generate indexation effects that move inflation still further from the target rate. This macroeconomic context also implies reduced space for expansionary monetary policy. 1.2 Monetary policy decision Banco de la República’s board of directors (BDBR) continues to adjust its monetary policy. In its meetings both in March and April of 2022, it decided by majority to increase the monetary policy rate by 100 basis points, bringing it to 6.0% (Graph 1.5).

1.1 Macroeconomic summary In September, headline inflation (11.4% annually) and the average of core inflation indicators (8.6% annually) continued on a rising trend, and higher increases than expected were recorded. Forecasts increased again, and inflation expectations remained above 3%. Inflationary surprises in the third quarter were significant and widespread, and they are the result of several shocks. On the one hand, international cost and price shocks, which have mainly affected goods and foods, continue to exert upwards pressure on national inflation. In addition to these external supply shocks, domestic supply shocks have also affected foods. On the other hand, the strong recovery of aggregate demand, especially for private consumption and for machinery and equipment, as well as a higher accumulated depreciation of the Colombian peso and its pass-through to domestic prices also explain the rise in inflation. Indexation also contributes, both through the Consumer Price Index (CPI) and through the Producer Price Index (PPI), which continues to have a significant impact on electricity prices and, to a lesser degree, on other public utilities and rent. In comparison with July’s report, the new forecast trajectory for headline and core inflation (excluding food and regulated items) is higher in the forecast horizon, mainly due to exchange rate pressures, higher excess demand, and indexation at higher inflation rates, but it maintains a trend of convergence towards the target. In the case of food, a good domestic supply of perishable foods and some moderation in international processed food prices are still expected. However, the technical staff estimates higher pressures on this group’s prices from labor costs, raw material prices, and exchange rates. In terms of the CPI for regulated items, the new forecast supposes reductions in electricity prices at the end of the year, but the effects of indexation at higher inflation rates and the expected rises in fuel prices would continue to push this CPI group. Therefore, the new projection suggests that, in December, inflation would reach 11.3% and would decrease throughout 2023 and 2024, closing the year at 7.1% and 3.5%, respectively. These forecasts have a high level of uncertainty, due especially to the future behavior of international financial conditions, external price and cost shocks, the persistence of depreciation of the Colombian peso, the pace of adjustment of domestic demand, the indexation degree of nominal contracts, and the decisions that would be made regarding domestic fuel and electricity prices. Economic activity continues to surprise on the upside, and the projection of growth for 2022 rose from 6.9% to 7.9% but lowered for 2023 from 1.1% to 0.5%. Thus, excess demand is higher than estimated in the previous report, and it would diminish in 2023. Economic growth in the second quarterwas higher than estimated in July due to stronger domestic demand, mainly because of private consumption. Economic activity indicators for the third quarter suggest that the GDP would stay at a high level, above its potential, with an annual change of 6.4%, and 0.6% higher than observed in the second quarter. Nevertheless, these numbers reflect deceleration in its quarterly and annual growth. Domestic demand would show similar behavior, with a high value, higher than that of output. This can be explained partly by the strong behavior of private consumption and investment in machinery and equipment. In the third quarter, investment in construction would have continued with mediocre performance, which would still place it at levels lower than those observed before the pandemic. The trade deficit would have widened due to high imports with a stronger trend than that for exports. It is expected that, in the forecast horizon, consumption would decrease from its current high levels, partly as a consequence of tighter domestic financial conditions, lower repressed demand, higher exchange rate pressures on imported goods prices, and the deterioration of actual income due to the rise in inflation. Investment would continue to lag behind, without reaching the levels observed before the pandemic, in a context of high financing costs and high uncertainty. A lower projected behavior in domestic demand and the high levels of prices for oil and other basic goods that the country exports would be reflected in a reduction in the trade deficit. Due to all of this, economic growth for all of 2022, 2023, and 2024 would be 7.9%, 0.5%, and 1.3%, respectively. Expected excess demand (measured via the output gap) is estimated to be higher than contemplated in the previous report; it would diminish in 2023 and could turn negative in 2024. These estimates remain subject to a high degree of uncertainty related to global political tension, a rise in international interest rates, and the effects of this rise on demand and financial conditions abroad. In the domestic context, the evolution of fiscal policy as well as future measures regarding economic policy and their possible effects on macroeconomic imbalances in the country, among others, are factors that generate uncertainty and affect risk premia, the exchange rate, investment, and the country’s economic activity. Interest rates at several of the world’s main central banks continue to rise, some at a pace higher than expected by the market. This is in response to the high levels of inflation and their inflation expectations, which continue to exceed the targets. Thus, global growth projections are still being moderated, risk premia have risen, and the dollar continues to gain strength against other main currencies. International pressures on global inflation have heightened. In the United States, core inflation has not receded, pressured by the behavior of the CPI for services and a tight labor market. Consequently, the U.S. Federal Reserve continued to increase the policy interest rate at a strong pace. This rate is expected to now reach higher levels than projected in the previous quarter. Other developed and emerging economies have also increased their policy interest rates. Thus, international financial conditions have tightened significantly, which reflects in a widespread strengthening of the dollar, increases in worldwide risk premia, and the devaluation of risky assets. Recently, these effects have been stronger in Colombia than in the majority of its peers in the region. Considering all of the aforementioned, the technical staff of the bank increased its assumption regarding the U.S. Federal Reserve’s interest rate, reduced the country’s external demand growth forecast, and raised the projected trajectory for the risk premium. The latter remains elevated at higher levels than its historical average, within a context of high local uncertainty and of extensive financing needs from the foreign sector and the public sector. All of this results in higher inflationary pressures associated to the depreciation of the Colombian peso. The uncertainty regarding external forecasts and its impact on the country remain elevated, given the unforeseeable evolution of the conflict between Russia and Ukraine, of geopolitical tensions, and of the tightening of external financial conditions, among others. A macroeconomic context of high inflation, inflation expectations and forecasts above 3%, and a positive output gap suggests the need for contractionary monetary policy, compatible with the macroeconomic adjustment necessary to eliminate excess demand, mitigate the risk of unanchoring in inflation expectations, and guarantee convergence of inflation at the target. In comparison with the July report forecasts, domestic demand has been more dynamic, with a higher observed output level that surpasses the economy’s productive capacity. Headline and core inflation have registered surprising rises, associated with the effects of domestic and external price shocks that were more persistent than anticipated, with excess demand and indexation processes in some CPI groups. The country’s risk premium and the observed and expected international interest rates increased. As a consequence of this, inflationary pressures from the exchange rate rose, and in this report, the probability of the neutral real interest rate being higher than estimated increased. In general, inflation expectations for all terms and the bank’s technical staff inflation forecast for 2023 increased again and continue to stray from 3%. All of the aforementioned elevated the risk of unanchoring inflation expectations and could heighten widespread indexation processes that push inflation away from the target for a longer time. In this context, it is necessary to consolidate a contractionary monetary policy that tends towards convergence of inflation at the target in the forecast horizon and towards the reduction of excess demand in order to guarantee a sustainable output level trajectory. 1.2 Monetary policy decision In its September and October of 2022 meetings, Banco de la República’s Board of Directors (BDBR) decided to continue adjusting its monetary policy. In September, the BDBR decided by a majority vote to raise the monetary policy interest rate by 100 basis points (bps), and in its October meeting, unanimously, by 100bps. Therefore, the rate is at 11.0%. Boxes 1 Food inflation: a comparison with other countries