Colombia: Economic growth gains steam in Q3
November 22, 2017
Economic growth accelerated in annual terms in the third quarter, climbing to 2.0% from a revised 1.2% in the second quarter (previously reported: +1.3% year-on-year). A rebound in exports and continued surge in government spending spearheaded the pick-up. The result, however, undershot market expectations of a 2.2% rise.
On the domestic side, demand was driven by increased government consumption (Q3: +3.9% yoy; Q2: +3.6% yoy), while private consumption expanded 1.7% year-on-year, the same rate as in the previous quarter. A substantial slowdown in fixed investment, however, led to weaker growth in total domestic demand. Fixed investment growth in Q3 plunged to a meagre 0.2% from the same period last year, down from 1.0% year-on-year growth in Q2. The slowdown in fixed investment was largely due to a contraction in construction activity (Q3: -2.1% yoy; Q2: +0.3% yoy).
The external sector improved in Q3: Exports rebounded, rising 4.5% year-on-year (Q2: -1.5% yoy) as agricultural output jumped on the back of better weather conditions (Q3: +7.1% yoy; Q2: 3.7% yoy). Meanwhile, growth in imports dropped to 2.5% (Q2: +3.3% yoy).
In seasonally-adjusted, quarter-on-quarter terms, economic growth picked up to a 0.8% expansion in Q3, following a revised 0.5% rise in Q2 (previously reported: +0.7% quarter-on-quarter).
Colombia GDP Forecast
Panelists participating in the LatinFocus Consensus Forecast project that GDP will expand 2.6% in 2018, which is down 0.1 percentage points from last month’s forecast. For 2019, panelists expect GDP to grow 3.1%
Author: Nihad Ahmed, Economist