Colombia: GDP expands pushed by exports
September 19, 2013
In the second quarter, GDP grew 4.2% over the same quarter last year, exceeding the expansion of 2.7% registered in the first quarter. The expansion, which beat market expectations of a 3.7% increase, marks the highest increase in GDP in the last four quarters on a year-on-year basis.
The Q2 growth was driven by stronger domestic demand performance than in the previous quarter. Total consumption grew 4.6% in the second quarter (Q1 2013: +3.6% year-on-year), pushed by acceleration in both private consumption (Q1: +3.5% yoy; Q2: +4.4% yoy) and government spending (Q1: +4.2% yoy; Q2: +5.0% yoy). Fixed investment registered a 2.9% expansion over the same period last year, which fell slightly short of the previous quarter's 3.1% increase.
Meanwhile, the external sector improved substantially over Q1 with growth in exports soaring to 7.6% (Q1: -2.7% yoy). Imports increased a minimal 1.3% after having contracted a 0.2% in the previous quarter. As a result, the external sector's net contribution to overall growth rebounded from minus 0.4 percentage points in the first quarter to 0.9 percentage points in the second quarter, marking the largest contribution to GDP growth since December 2009.
A quarter-on-quarter comparison suggests a turning point in the deceleration marked by previous annual data. The economy expanded 2.2% over the previous quarter in seasonally-adjusted terms, which was well above the 0.3% increase recorded in the first quarter. This figure was the highest observed since December 2010.
The Central Bank projects economic growth to reach a level of between 3.0% and 4.5% this year, while the government expects the economy to expand between 4.4% and 4.5%. LatinFocus Consensus Forecast panelists expect GDP to grow 3.9% in 2013, which is unchanged from last month's projection. For next year, the panel has confirmed the economic growth forecast of 4.5%.