Colombia: GDP slows to weakest expansion in over six years in Q3
November 25, 2016
The Colombian economy continues to grapple with low oil prices two years after prices first started to fall. Official production-based data released on 25 November showed that GDP grew 1.2% over the same quarter last year in Q3. The result came in below both the 2.0% increase registered in Q2 and market expectations of a 1.5% rise, marking the worst result in over six years—a time when the economy was gripped by the fallout from the global financial crisis. According to the Colombian National Statistical Institute (DANE), Q3’s weaker-than-expected print was mainly driven by, among other factors, the 45-day truckers’ strike that ended in late July and by subdued global trade.
In Q3, four of the nine economic sectors declined relative to the previous quarter. As expected, the transport sector contracted, along with the agriculture, utilities and mining sectors. Mining, in particular, recorded a dramatic contraction, reflecting lower oil production (-13.0% year-on-year). Oil output is expected to remain weak as investment in the sector remains low. The agricultural sector was mainly affected by a significant drop in coffee output, partly related to adverse weather conditions. On the other hand, large expansions in construction, finance and the manufacturing sectors were registered in the three-month period to September.
In seasonally-adjusted terms, the economy expanded 0.3% over the previous quarter in Q3, which was slightly above Q2’s 0.1% increase.
Author: Luis Lopez Vivas, Economist