Colombia Economic Outlook
January 21, 2020Available data hints that the economy likely sustained a solid pace of expansion in the final quarter of 2019, after growing at the fastest pace in four years in the third quarter. The manufacturing PMI improved in the fourth quarter amid upbeat business sentiment, while retail sales growth maintained a healthy pace in October–November against the backdrop of falling unemployment, suggesting stronger household consumption. Meanwhile, on 20 December, Congress approved a revised version of the December 2018 tax reform, which had been declared unconstitutional by the Supreme Court in October and thus forced the government to resubmit the proposal. Provisions in the newly passed law included gradually cutting the corporate tax rate from 33% to 30% by 2022, which ought to stimulate investment. It also included a VAT rebate for the poorest 20% of the population–likely in response to large street protests that took place in December–, which could boost household consumption going forward.
Colombia Economic GrowthThe economy is expected to remain solid this year on the back of robust growth in fixed investment amid lower corporate taxes and fiscal exemptions, and still-healthy private consumption. However, social unrest and political tensions, which could hurt consumer and investor confidence, and a fairly high external debt burden pose downside risks to the outlook. FocusEconomics panelists project GDP to grow 3.2% in 2020, which is unchanged from last month’s forecast, and 3.2% again in 2021.
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|Bond Yield||6.08||0.0 %||Dec 30|
|Exchange Rate||3,287||-0.17 %||Jan 01|
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Colombia Economic News
January 17, 2020
Industrial production fell 1.5% on an annual basis in November, contrasting October’s 2.2% expansion (previously reported: +2.1% year-on-year) and marking the lowest reading since March 2018 according to the Statistical Institute (DANE).
January 16, 2020
Consumers turned less pessimistic in December, with the Fedesarrollo consumer confidence index rising to minus 9.5 from minus 14.4 in November and marking the best reading in five months.
January 4, 2020
Consumer prices rose 0.26% over the previous month in December, accelerating from November’s 0.10% increase.
January 3, 2020
Exports fell 13.6% over the same month of 2018 in November, following the 11.9% year-on-year drop in October and marking the sharpest fall in nearly a year.
January 2, 2020
Business conditions in Colombia’s manufacturing sector continued to improve in December, albeit to a lesser extent than in November.