1. This statement provides additional information that has become available since the staff report was issued. It does not alter the thrust of the staff appraisal.
2. President Juan Manuel Santos was re-elected on Sunday to serve a new four-year term after a tight race against the opposition candidate Oscar Ivan Zuluaga.
President Santos gained 51 percent of the votes, while Mr. Zuluaga obtained 45 percent. The inauguration will take place in August.
The re-election of President Santos will allow the government to continue peace negotiations with Colombia’s main guerrilla group (FARC).
There were no market reactions from the election result, as both candidates share similar economic policy agendas that support fiscal prudence and building policy buffers.
3. Headline inflation edged up slightly to 2.9 percent in May (y/y) from 2.7 percent (y/y) in April. As discussed in the staff report, the central bank has been acting proactively and has raised the policy rate by 50 basis points since April 2014 to contain the inflation within the central bank’s target range of 2–4 percent.