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Colombian economy grows in second quarter more than expected

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Colombia’s economy expanded by 12.6% in the second quarter, compared to the same period last year, a result higher than expected by the market, driven by dynamic domestic consumption, the National Department of Statistics (DANE) reported on Tuesday.

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According to the median of a recent Reuters poll, the market expected growth of 11.25% year-on-year for the period between April and June.

The data even exceeded the projection of the Central Bank, of 11.5%, although it was below the expansion of 18.3% in the second quarter of the previous year.

The greatest expansions in the quarter occurred in artistic and entertainment activities with 36.5%, in commerce with 23.3%, in the manufacturing industry with 20.3% and in the information and communications sector with 17.2%.

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Other increases occurred in professional, scientific and technical activities with 12.3%, in the financial sector with 11.4%, in construction with 9.4%, in public administration with 9%, in public services with a 7.2%, while the agricultural sector grew one percentage point, specified the DANE report.

Meanwhile, investment reported a growth of 23.6% in the second quarter compared to the same period in 2021.

In intermonthly terms, the Colombian economy expanded by 1.5% in the second quarter compared to the period between January and March.

In the accumulated of the first semester, the Gross Domestic Product (GDP) expanded by 10.6%, compared to the same period of the previous year.

This puts us on a growth path that we have been observing since the second quarter of 2021″, said Julieth Solano, deputy director in charge of DANE. “Quarter by quarter we have had a better performance”.

The Central Bank last month raised its projection for Colombian GDP growth for this year to 6.9%, from a previous 6.3%.

The agency raised its benchmark interest rate to 9% in July, its highest level since February 2009, due to local and international inflationary pressures.

The recently inaugurated President Gustavo Petro seeks to promote agricultural activities and the manufacturing industry so that they have a greater weight in GDP, while planning an energy transition by discouraging the extractive industries of oil and coal.

Additionally, his Government is processing a tax reform to increase tax collection by an additional 25 billion pesos next year (US$ 5,973 million), a figure that would double at the end of his term, in 2026.

Source: Gestion

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