Academic literature on the topic 'Sales of Goods law'

IN business, it is desirable to have certain law that makes good commercial sense, and helpful to know what fundamental concepts like “a contract of sale of goods” actually mean. The Supreme Court in PST Energy 7 Shipping LLC and another v OW Bunker Malta Ltd. and another (“The Res Cogitans”) [2016] UKSC 22 grappled with precisely this question.

SummaryDuring the Second World War Germany and German nationals looted the Netherlands and its nationals of many valuable assets, that were taken to Germany. Often the looting took the form of forced sales. In some cases, the sales price was too low, in other cases the German buyer paid market value or more, but often the buyer paid with guilders looted from the Dutch State. After the liberation of the Netherlands the ‘restoration of rights regime’ enabled victims of forced sales to seek annulment of the sales. This article concentrates on those movable goods that were sold to German buyers and that, after the war, returned from Germany to the Netherlands with the help of the Allied Forces, the so-called recuperation goods. If the seller did not seek annulment before the deadline of July 1951, for example because the price paid was considerable so that he preferred to keep the purchase price, or if his request was rejected, the Dutch State should not be forced to return these goods to their German buyer. Therefore, these goods were first subjected to Royal Decree E 133 which expropriated all German owned property in the Netherlands. Upon return to the Netherlands the recuperation goods became State property, but this measure could be undone by the seller successfully seeking annulment of the sales contract under Royal Decree E 100. However, if no annulment took place, the State remained owner of these goods.

CONSUMER SALES IN THE UNITED NATIONS CONVENTION ON CONTRACTS FOR THE INTERNATIONAL SALE OF GOODS AND IN THE CIVIL CODEThe article presents the concept of consumer sales and consumer sales in the regulation of the United Nations Convention on Contracts for the International Sale of Goods and the definition of consumer sales in the Polish Civil Code along with a comparison of these two regulations. It indicates some inconsistencies between Polish law and the Convention as well as their possible consequences and it proposes methods of their elimination.

Good faith is a true principle widely established by the positive law. But how does this principle operate? How is the connection made between an undetermined legal standard, such as good faith, and the practical operations by which contractual obligations are fulfilled? The essay will answer to these questions by providing a comprehensive analysis of how the concept of good faith operates in a variety of national law systems.

The new Consumer Sales Directive (2019/771 EU) is a total harmonisation directive intended to make cross-border sales more attractive to sellers by ensuring that the level of consumer‑protection rules differs less among Member States. The legislation process resulted, however, in several exceptions to this approach of total harmonisation. These exceptions, coupled with the fact that the directive does not regulate the consumer’s obligations under the sales contract, means that sellers must still be prepared to grapple with considerable differences in the level of consumer protection when offering their goods to consumers in other countries than their own. The Europeanisation of contract law seems to remain a contentious arena.

Professor Schwenzer compares common law notions about a party's ability to avoid a sales contract with the position under article 49 of the Convention on the International Sale of Goods. Having noted that the approach of the CSIG has given rise to criticism, she then argues that such criticism is unfounded and that, moreover, the CSIG's provisions reflect the reality of international sales practice and case law.

The author discusses the Canadian jurisprudence involving the application, or potential application, of the CISG. He concludes that the Canadian courts are beginning to implement the CISG, but that there is still a tendency to apply domestic law alongside, or even in preference to, the international sales law, even when this is not warranted.

Disparities in national laws are likely to result in uncertainty which, in turn, creates obstacles to international commerce. It is acknowledged that strong investment flows cannot be achieved without a secure legal and commercial environment. Mindful of such a need, states decided to harmonise sales law internationally. To this end, in 1980 they adopted the United Nations Convention on Contracts for the International Sale of Goods known as the Vienna Sales Convention or the CISG. The CISG has led a number of countries, including the Organisation for the Harmonisation of Business Law in Africa (OHADA) law states, to modernise their local sales law. However, only three of 17 countries that constitute the OHADA community have ratified the CISG. OHADA law countries give the impression of favouring a more regional approach to the unification of sales law rather than the CISG’s global approach by implementing a local Commercial Uniform Act. Their indifference towards the CISG is not without consequences for commerce in the OHADA region. This article seeks to demonstrate that the lack of ratification of a universal convention, as for example the CISG, poses a danger to commercial dealings. It also intends to show that the CISG is not hostile to regional uniform sales laws of the OHADA Commercial Uniform Act type. It concludes that OHADA countries do not need to be afraid of their acceptance of the CISG and recommends that it be ratified.

Thesis (M.A.)--City University of Hong Kong, 2007.<br>Title from PDF t.p. (viewed on Sept. 7, 2007) "Master of Art in arbitration and dispute resolution LW6409 dissertation" Includes bibliographical references.

This thesis examines the seller's obligations of both delivery and conformity under a contract of sale. In this context, the related rules under both English law (represented by the Sale of Goods Act 1979) and the Vienna Convention on Contracts for the International Sale of Goods 1980 have been explored and compared with each other. It was initially necessary to indicate the importance of the Vienna Convention as a model for unifying the law of international trade. As well as indicating potential reasons as to why the UK is unconvinced that it should become a member of the Convention, as well as briefly examining the previous efforts that led to the conclusion of the Convention. While delivery is not defined under the Convention, the SGA considers it a voluntary transfer of possession. Moreover, delivery under English law takes place independently from the transferral of ownership. The matter of transferring the ownership in the goods is not however, dealt with under the Convention, and should be solved by reference to private international law. According to English law the delivery goods must meet the description in sale by description, correspond with the sample in sale by sample, and in all cases be of a satisfactory quality. The goods must meet a particular purpose where some conditions are met, as well as having to be in the right quantity. Art 35 of the Vienna Convention is considered a counterpart of the said rules. Should the seller however, attempt to exclude his liability regarding the said implied terms, such an attempt is subject to the UCTA 1977 and the Unfair Terms in Consumer Contracts Regulations, 1999. In another respect, delivery of the goods may take place actually or constructively, such as delivery by documents, or delivery through a carrier. Furthermore, there are particular rules that control the process of delivery, such as time, place and expenses connected with delivery. Obviously, the intention of the parties plays the essential role in determining these matters. One of the most important issues is the legal effect of the seller's breach of his obligation of conformity or delivery. Here, the buyer is entitled to a wide range of remedies, such as rejection of the goods and avoiding the contract of sale, specific performance, reduction of the price, or damages. The approaches here of both English law and the Convention are distinct in relation to some particular remedies, such as specific performance and reduction of the price.

The development of the United Nation’s Convention on Contracts for the International Sale of Goods (CISG) started at the beginning of the 20th century in order to provide a uniform legal regime for international sales contracts. The development started because of a belief that a uniform international sales convention would contribute certainty in commercial trade and decrease transaction costs for the contracting parties. The Convention was signed in Vienna 1980 and came into force in 1988 after securing the necessary number of ratifications. The CISG is automatically applied to international sale contracts in certain given situations but the contracting parties are free to exclude the Convention as applicable law in favour of another regulation. As of today, more than 25 years after the CISG came into force, the Convention is commonly being excluded as the governing law of international sales contracts. By studying surveys and academic writings, certain factors can be derived as reasons prior to an exclusion of the CISG. The factors can be referred to as unfamiliarity, time and costs, negotiation strength and standard form contracts or standard terms. Regarding unfamiliarity, the importance given to the Convention in law faculties within the signatory states, together with time and costs attributed to a familiarization process, seems to play an important role. Moreover, the Convention is associated with problems regarding a non-uniform interpretation of the Convention’s provisions within the national courts and arbitral tribunals, as well as regarding its incompleteness, meaning that there are gaps that need to be filled by national law. These problems affect the Convention’s ability to provide potential users with legal certainty and predictability, which in turn may affect the familiarity with the Convention and hence have an impact on an exclusion of the CISG.

The main purpose of the research is to investigate and analyze the concept of fundamental breach of contract in international commercial contracts, and how its inclusion in Iraqi civil law can promote a more effective approach to contractual disputes between Iraqi companies and international partners. Additionally, it aims to raise awareness of the practical value of the application of the concept of fundamental breach in managing contractual disputes involving common and civil law, and ultimately provide a valid contribution to academic knowledge that promotes enhanced understanding of this concept within the different legal systems at a global level. The research method adopted is theoretically comparative in nature and compares the concept of fundamental breach of contract from the perspectives of the United Nations Convention's guidelines on Contracts for the International Sale of Goods 1980 (referred to hereafter as the CISG), English (Common) law and Egyptian (Civil) law. The study is based on the following research questions: i) reasons for the numerous cases of avoidance of international commercial contracts in Iraq due to a fundamental breach of terms; ii) The elements that constitute a 'fundamental breach' of contract; iii) Which legal systems could provide a comprehensive framework of reference to compare the different processes applied in breach of contract in selected case studies, to determine which, if any, is more effective in keeping contracts 'active'. iv) If the outcome of the comparisons could be applied more universally, in cases of arbitration in international commercial contracts, to bridge the differences in individual laws of the countries involved. The concept of fundamental breach is examined in-depth, including its origins, development, application and effectiveness in maintaining the active life of international commercial contracts. A comparison of its application is made within three different legal systems and the study concludes with a commentary on the outcomes of the comparative research, including any limitations and implications for international sales contracts involving different legal systems. Finally, recommendations are made, both for the Iraqi legislature and for future research. The key outcomes are that the CISG rules regarding fundamental breach appear to be more successful in upholding the validity of international commercial contracts than Common or Civil law. This can be attributed to the way in which the CISG tailored the concept of fundamental breach. To date, it has been ratified by 83 countries. Not only are its principles rooted in the two primary law systems (Common and Civil), but they are also significantly influenced by the doctrinal concepts that vary considerably across different national law systems. This suggests the CISG offers a greater degree of flexibility and harmony across the legal systems, and does not require any court order or ruling in instances of contract avoidance. Indeed, its greatest success lies in the flexibility of its principles due to the additional terms it provides in promoting the life of the contract; namely: additional period of time, partial avoidance, anticipatory breach and instalments contracts. There are limitations, however, despite the CISG rules providing a degree of flexibility. The definition of fundamental breach given in Art.25 is vague due to the generality of the terminology used by the CISG drafters. Unlike the trend of the 1998 Principles of European Contract Law and the 1994 UNIDROlT Principles of International Commercial Contracts, no examples are given to provide guidance on the exact meaning of the term. It is also noticeable that the CISG's notion of fundamental breach is more common law oriented. As a result, this may be a source of possible conflict in countries where civil law is adopted such as: Egypt, Iraq, Kuwait, Jordan, Libya, amongst others. The implications of adopting the CISG approach to determining fundamental breach in international commercial contracts are that contractual parties could incur delays and subsequent financial losses while disputes involving interpretation of its rules are resolved. Nevertheless, CISG principles governing fundamental breach are increasingly popular as the applicable law for international contracts, since they fulfill a primary goal of contract law to act in accordance with developmental requirements and changes. Contract law has to correspond to a growing economic need and be flexible in addressing emerging difficulties and shifting conditions. For this reason the CISG's principles are likely to continue to be adopted by contractual parties within the arena of International Trade. A necessary recommendation, however, concerns the terminology of the CISG rules on fundamental breach, which could benefit from being more specific in order to satisfy the demands of international commercial contracts that involve countries governed by common and civi11aw. In short, greater specificity is required in ascertaining the degree of seriousness, detriment, foreseeability and time of foreseeability in cases of contractual breach.Establishing an international body for resolving disputes stemming from the CISG is highly recommended. The given body could contribute greatly to reducing both the time and the cost resulting from such disputes. Reviewing the provisions of the CISG periodically is, therefore, highly advisable for making changes or establishing new rules applicable to the new developments in trade. The avoidance of contract in electronic trade contracts could represent an example where this would be necessary. However, more discussion is needed to elaborate on the development of the wording of the CISG principles in this respect. Finally, with regard to Iraq, its legislation would do well to make provision to include the concept of fundamental breach in accordance with the principles of the CISG. This reform is necessary since Iraq's existing law is no longer capable of properly addressing the special demands of international trade to ensure disputes are dealt with in a manner that is reliable, consistent, valid and fair to the contractual parties concerned.

This chapter examines the rules of English law governing international sales as they affect buyer and seller. There is more than one way in which a sale of goods contract may have an international element. For example, the seller and buyer may be in different jurisdictions, or the contract of sale may contemplate that the goods are to be carried from one country to another. A surprisingly large proportion of international trade is carried on under contracts governed by English law by choice of the parties. This chapter begins with a discussion of typical export transactions under INCOTERMS 2010, a set of international rules for the interpretation of trade terms promulgated by the International Chamber of Commerce. It then considers sales via sea carriage, along with other contracts involving international sales. It also analyses payment in international sales transactions and concludes with an overview of future prospects for international sales.

This chapter identifies what amounts to an international sale, discusses the ways in which the nature of the law of international sales of goods differs from domestic sales, and explores how documents are used to deal with some of the legal risks associated with contracts involving international deliveries. It then looks at a typical international sale in outline, before focusing in detail on how the bill of lading, perhaps the most characteristic document used in international sales, operates. In a documentary sale, the mechanics of the completion of the sale is effected by delivery of documents both by the seller, with documents relating to the goods, and by the buyer, with documents representing payment.

Intendment of the paper herein, to evaluate of new provisions regarding sales and commercial sales amended by new Turkish Code of Obligations numbered 6098 in the context of Vienna Convention on Contracts for the International Sale of Goods which is effective since 01 January 1988. It has a significance to be able to understand why the provisions of the convention have not been completely quoted to Turkish Code of Obligations. Turkish Code of Obligations' numbered 6098, Vienna Convention on Contracts for the International Sale of Goods and Provisions of Vienna Convention on Contract for the International Sale of Goods (CISG/United Nations Convention), Comparing of civil law, common law, and combinations of these (especially Sales contracts in civil law and sales contracts in common law).During the legislation process of Turkish Code of Obligations' provisions regarding sales, both Vienna Convention on Contracts for the International Sale of Goods (CISG/United Nations Convention) and Swiss law has been constituted a source. The Vienna Convention is effective since 01 January 1988 and Turkey has participated to (CISG) on 01 August 2011 and it has been a part of domestic law. The aim of (CISG) is to eliminate the differences among the countries' laws regarding sales; i.e. it constitutes a linking rule and the rules of sales. Since the Convention has been legislated with the effect of various law families and systems, provisions of the convention have not been completely adopted to code of obligations.

Avoidance the Contract is a kind of legal system arrangement which is adopted as a private law enforcement applied effortlessly, in the context of not to be performed delivery of goods in accordance with the contract. Merely, International Tendency in 20th century have fronted that avoidance of the contract is the “ultimum remedium” in the case of any breach of the contract. In several of modern sale law systems, for instance in German Law and Scandinavian Law systems, avoidance of the contract is a process which should be applied in the case of other enforcements are inadequate. The “Convention on International Sale of Goods (CISG)” which has stipulated the same solution way, has an important role in the formation of this modern tendency mentioned below. In accordance with the CISG enforcement of avoidance of the contract shall be exercised in the case of essential breach of the contract. Besides, In case of insubstantial breaches, the buyer is enabled to refer a possibility “the avoidance of the contract” as if the breach is a kind of material breach of the contract by giving additional period to the seller who the party in breach. Despite the additional period of time fixed him, in the case of the seller does not perform delivery of the goods the buyer shall have the right to avoidance of the contract.

One of the effects of the COVID-19 crisis is the significant acceleration of e-commerce. The number of companies and the varieties of products in the online markets increased, as well as the numbers of consumers and consumers’ segments diversification. The e-commerce in pandemic times offered clear benefits and opportunities for the consumers. It also created situations where the lack of confidence in e-commerce may intensify. This comes from the consumers’ uncertainty on their key contractual rights and it is particularly a case when it comes to the contracts for supply of digital content and digital services. The European Union considered that legal certainty for consumers (and businesses) will increase by full harmonisation of key regulatory issues and that this would lead to growth of the potentials the e-commerce has on the common market. Aiming to achieve a genuine digital single market the Council of the European Union and the European Parliament in May 2019 have adopted the Directive (EU) 2019/770 on certain aspects concerning contracts for the supply of digital content and digital services (the "Digital Content Directive") and the Directive (EU) 2019/771 on certain aspects concerning contracts for the sale of goods (the "Sales of Goods Directive") that regulate the supply of digital content and digital services and sale of goods with digital elements, respectively. Both directives lay down specific rules on the conformity of digital content or a digital service i.e., goods with digital elements with the contract, remedies in the cases of a lack of conformity or a failure to supply, as well as the modalities for the exercise of those remedies. The paper analyses the mechanisms for regulation of the contracts for the supply of digital content and digital services and the specific rights and obligations of the parties to these contracts. The main objective of the research is to assess to which extent these mechanisms are novelty in the European Consumer Law and to examine the obstacles that the application of consumer law to digital content contracts may encounter.

United Nations Convention on Contracts for the International Sale of Goods (CISG) entered into force on the 1st August 2011 in Turkey. CISG is accepted with the purpose of development and encouragement of international trade and application of uniform rules for resolution of disputes arising from the contracts for the international sale of goods. CISG applies to contracts of sale of goods between parties whose places of business are in different states when the states are contracting states; or when the rules of private international law lead to the application of the law of a contracting state. Neither the nationality of the parties nor the civil or commercial character of the parties or of the contract is to be taken into consideration in determining the application of CISG. In order to apply CISG, there has to be a contract about international sale of goods and the parties shall be from different contracting states or the rules of private international law shall lead to the application of the law of a contracting state. The parties may totally or partially exclude the application of this CISG. CISG does not apply in terms of third party rights and the validity of the contract or of any of its provisions or of any usage.

Каждый день мы делам покупки в сфере торговли. И зачастую мы видя заманчивые предложение в организациях торговли введемся на их предложения, забывая прежде всего о качестве. Зачастую сталкиваемся с товарами реализуемые с ненадлежащим качеством и появлением в этих товарах недостатков. При осуществлении покупки некачественного товара потребитель не всегда принимает соответствующие меры, а написав претензию и наткнувшись на отказ продавца, обменять товар или вернуть деньги. И в законе, не определена ответственность владельца магазина за продажу недоброкачественного товара, не определена обязанность суда взыскать с продавца штраф за продажу товара ненадлежащего качества, а так же не понятна новая формулировка в законе «О защите прав потребителей» «неопределенный круг лиц», редко обращается в суд. Every day we do business shopping in the field of commerce. And often when we see a tempting offer in trade organizations, we will introduce ourselves to their offers, forgetting first of all about quality. Often we encounter goods sold with inadequate quality and the appearance of deficiencies in these goods. When making a purchase of low-quality goods, the consumer does not always take appropriate measures, but after writing a claim and stumbled upon the seller’s refusal, exchange the goods or return the money. And in the law, the responsibility of the store owner for the sale of defective goods is not defined, the court’s obligation to recover a fine from the seller for the sale of goods of inadequate quality is not defined, and the new wording in the law “On Protection of Consumer Rights” “an indefinite circle of people” is rarely understood appeals to the court.

Business environment reform (BER) targets inadequate business regulations. It is intended to remove constraints to business investment, enabling growth and job creation, and create opportunities for international business to contribute to and benefit from this growth. However, there is a lack of detailed knowledge of the impact of BER on gender and inclusion (G&amp;I). While a review of existing literature suggests that in general, there is no direct link between BER and G&amp;I, indirect links are likely through the influence of BER on firm performance. Outcomes will be influenced by the differential ways in which women-led firms experience the business environment when compared to their male counterparts, with disparities based on how they are treated under the law, as well as structural and sociocultural factors. The fact that in many countries, female-led firms are fewer and smaller than those of their male counterparts, and may operate in different sectors, also affects these dynamics. This research offers new insights through an in-depth analysis of the impact of the Pelayanan Terpadu Satu Pintu (PTSP) or one-stop shop business licensing reform in 2009 on firm performance in Indonesia, and how these impacts vary based on the gender of firm leadership. The results find that on average, firms benefited from improved business performance (sales), as a direct or indirect effect of this reform, as well as an increase in the number of medium and large-scale firms. Outside Jakarta (Bali, Banten, Lampung), women-led firms experienced a small but significant benefit relative to male-led firms, related to both sales and the number of medium and large-scale firms they run. In Jakarta, women-led firms continued to lag behind men and there were no significant effects on employment, and this held across province and gender. These findings are based on an analysis of the PTSP reform using data from the World Bank Enterprise Survey (WBES), a survey of small, medium and large firms (i.e. with more than four employees) which took place in Indonesia between 2009 and 2015.

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%.

With its annual Payment Systems Report, Banco de la República offers a complete overview of the infrastructure of Colombia’s financial market. Each edition of the report has four objectives: 1) to publicize a consolidated account of how the figures for payment infrastructures have evolved with respect to both financial assets and goods and services; 2) to summarize the issues that are being debated internationally and are of interest to the industry that provides payment clearing and settlement services; 3) to offer the public an explanation of the ideas and concepts behind retail-value payment processes and the trends in retail payments within the circuit of individuals and companies; and 4) to familiarize the public, the industry, and all other financial authorities with the methodological progress that has been achieved through applied research to analyze the stability of payment systems. This edition introduces changes that have been made in the structure of the report, which are intended to make it easier and more enjoyable to read. The initial sections in this edition, which is the eleventh, contain an analysis of the statistics on the evolution and performance of financial market infrastructures. These are understood as multilateral systems wherein the participating entities clear, settle and register payments, securities, derivatives and other financial assets. The large-value payment system (CUD) saw less momentum in 2019 than it did the year before, mainly because of a decline in the amount of secondary market operations for government bonds, both in cash and sell/buy-backs, which was offset by an increase in operations with collective investment funds (CIFs) and Banco de la República’s operations to increase the money supply (repos). Consequently, the Central Securities Depository (DCV) registered less activity, due to fewer negotiations on the secondary market for public debt. This trend was also observed in the private debt market, as evidenced by the decline in the average amounts cleared and settled through the Central Securities Depository of Colombia (Deceval) and in the value of operations with financial derivatives cleared and settled through the Central Counterparty of Colombia (CRCC). Section three offers a comprehensive look at the market for retail-value payments; that is, transactions made by individuals and companies. During 2019, electronic transfers increased, and payments made with debit and credit cards continued to trend upward. In contrast, payments by check continued to decline, although the average daily value was almost four times the value of debit and credit card purchases. The same section contains the results of the fourth survey on how the use of retail-value payment instruments (for usual payments) is perceived. Conducted at the end of 2019, the main purpose of the survey was to identify the availability of these payment instruments, the public’s preferences for them, and their acceptance by merchants. It is worth noting that cash continues to be the instrument most used by the population for usual monthly payments (88.1% with respect to the number of payments and 87.4% in value). However, its use in terms of value has declined, having registered 89.6% in the 2017 survey. In turn, the level of acceptance by merchants of payment instruments other than cash is 14.1% for debit cards, 13.4% for credit cards, 8.2% for electronic transfers of funds and 1.8% for checks. The main reason for the use of cash is the absence of point-of-sale terminals at commercial establishments. Considering that the retail-payment market worldwide is influenced by constant innovation in payment services, by the modernization of clearing and settlement systems, and by the efforts of regulators to redefine the payment industry for the future, these trends are addressed in the fourth section of the report. There is an account of how innovations in technology-based financial payment services have developed, and it shows that while this topic is not new, it has evolved, particularly in terms of origin and vocation. One of the boxes that accompanies the fourth section deals with certain payment aspects of open banking and international experience in that regard, which has given the customers of a financial entity sovereignty over their data, allowing them, under transparent and secure conditions, to authorize a third party, other than their financial entity, to request information on their accounts with financial entities, thus enabling the third party to offer various financial services or initiate payments. Innovation also has sparked interest among international organizations, central banks, and research groups concerning the creation of digital currencies. Accordingly, the last box deals with the recent international debate on issuance of central bank digital currencies. In terms of the methodological progress that has been made, it is important to underscore the work that has been done on the role of central counterparties (CCPs) in mitigating liquidity and counterparty risk. The fifth section of the report offers an explanation of a document in which the work of CCPs in financial markets is analyzed and corroborated through an exercise that was built around the Central Counterparty of Colombia (CRCC) in the Colombian market for non-delivery peso-dollar forward exchange transactions, using the methodology of network topology. The results provide empirical support for the different theoretical models developed to study the effect of CCPs on financial markets. Finally, the results of research using artificial intelligence with information from the large-value payment system are presented. Based on the payments made among financial institutions in the large-value payment system, a methodology is used to compare different payment networks, as well as to determine which ones can be considered abnormal. The methodology shows signs that indicate when a network moves away from its historical trend, so it can be studied and monitored. A methodology similar to the one applied to classify images is used to make this comparison, the idea being to extract the main characteristics of the networks and use them as a parameter for comparison. Juan José Echavarría Governor