The bank’s technical team had previously said gross domestic product would grow between 3% and 7% in 2021.
The bank also lowered its projection for inflation, projecting it will end 2021 at 2.3% and 2022 at 2.7%, down from a previous estimate of consumer price growth of 2.7% for this year.
The Andean country’s economy will have contracted between 6.8% and 7.4% last year, with a 7.2% contraction as the most likely figure, the bank said in its quarterly economic report.
Two members of the bank board argued for a rate cut of 25 basis points at the board’s meeting last week, minutes published separately on Monday showed, on concerns about the recent restrictions.
The seven member board has held the benchmark interest rate at 1.75% for four months including in January.
The five policymakers who voted for the hold want the board to keep inflation in check, the minutes said. While inflation ended last year at a low 1.61%, it is expected to rise from the second quarter.
The minority group said low inflation allows for more support for economic recovery. They were concerned about Colombia’s second peak of coronavirus cases “and its possible effects, along with closures and restrictions, on economic activity,” the minutes added.
Large cities recently put in place shopping restrictions and curfews as cases soared after the Christmas holidays and intensive care unit occupancy exceeded 90%.
The Andean country has recorded more than 2.1 million confirmed cases of coronavirus and over 54,000 deaths. (Reporting by Julia Symmes Cobb and Nelson Bocanegra; editing by Richard Pullin)