Colombia: Economic growth slows in the third quarter
December 23, 2010
In the third quarter, GDP added 3.6% over the same quarter last year. The reading represented a deceleration over the 4.4% expansion recorded in the second quarter (previously reported: +4.5% year-on-year) and fell short of last month's LatinFocus Consensus Forecast, which had seen the economy growing 4.8%. Despite the third quarter deceleration, the economy has now recovered from the slowdown experienced in 2009. The deceleration in the third quarter was mostly driven by domestic demand. Total consumption grew 4.2% year-on-year in the third quarter (Q2: +4.1% yoy) while gross fixed investment inched down from a 2.9% expansion in the second quarter to 2.7%. On the other hand, the net contribution from the external sector to overall growth improved slightly over the second quarter. Exports accelerated from 2.1% in the second quarter to a 5.4% expansion in the third. Meanwhile, imports expanded 20.3% year-on-year in the third quarter, up from the 19.1% growth tallied in the previous quarter. As a result, the overall contribution from the external sector inched up from a 3.6 percentage point detraction in the second quarter to minus 3.4 percentage points in the third. At the sector level, the deceleration was led by a decline in agriculture, which contracted 0.9% in the third quarter (Q2: +0.6% year-on-year), while industry growth plummeted from 8.2% in the second quarter to 3.4%. Finally, growth in commerce improved over the previous quarter (Q2 2010: +4.8% yoy; Q3: +7.0% yoy). A quarter-on-quarter comparison corroborates the deceleration seen in the annual data, as the economy added 0.21% over the previous quarter, down from the 0.85% rise registered in the April-June period.