Colombia: Economic activity bounces back in July
Latest reading: Economic activity returned to growth in July, expanding 3.7% year on year (June: -1.0% yoy) and beating market expectations. Looking at the details of the release, July’s recovery was broad-based, with the agricultural, industrial and services sectors all rebounding.
As a result, the trend improved, with annual average growth in economic activity coming in at 1.1% in July, up from June’s 0.8%.
On a seasonally adjusted monthly basis, economic activity bounced back, rising 2.5% in July (June: -1.6% mom), the best result since September 2021.
Panelist insight: Santiago Tellez, analyst at Goldman Sachs, commented:
“We continue to expect positive but below-trend real growth in upcoming quarters. Tight domestic and external financial conditions, above-historical norm policy uncertainty, and elevated corporate tax burden will continue to bear on growth. These headwinds are likely to be mitigated by robust workers’ remittances and gradually recovering household disposable income, owing to generous minimum wage policies.”
Daniel Velandia and Diego Camacho Alvarez, analysts at Credicorp Capital, said:
“We are maintaining our GDP growth forecast for this year at 1.8%, although we put an upward bias. As mentioned in previous reports, the acceleration of public spending is not a surprise, but rather a confirmation of the overall economic picture. While the primary sector has exhibited volatility in growth figures, it has not fully offset the slowdown observed in both private investment decisions and modest household consumption dynamics.”