Colombia: Growth drops in Q1 to three-year low
Preliminary data revealed that Colombia’s GDP grew 1.1% year-on-year in the first quarter (Q4: +3.5% yoy), marking the worst reading since Q1 2017 amid the onset of the Covid-19 pandemic but slightly overshooting analyst expectations of a 0.9% expansion.
A sharp deterioration in both the external sector and the domestic economy drove the downturn. Exports plunged 6.1% annually in Q1, the worst reading since Q4 2014, weighed on by a demand shock due to the Covid-19 pandemic stalling the global economy and sparking supply disruptions, and amid low oil prices. Imports contracted 2.5%, also reflecting the demand shock.
Looking at the domestic economy, fixed investment plunged 4.9% over the same quarter last year (Q4 2019: +0.3% yoy), reflecting the sudden souring of the economic panorama. Meanwhile, private spending was more upbeat, expanding 3.8%, but was still down from the fourth quarter’s 4.5% expansion; Colombia only went into lockdown to contain the disease on 25 March, so the bulk of the domestic measures on the economy will be felt in Q2. Government spending growth also decelerated, rising 3.2% in the first quarter after expanding 3.7% in the fourth quarter.
On a quarterly-basis, GDP plunged 2.4% in Q1 swinging from Q4’s 0.5% growth.
Looking ahead, the economy is expected to fall into a deep recession in the second quarter as the economic fallout from Covid-19 amplifies. Halted tourism, depressed demand and historically-low oil prices