Investment in Colombia
Colombia - Investment
Decline in GDP moderates in Q4
According to preliminary data, GDP contracted 3.6% in annual terms in the last quarter of 2020, moderating notably from Q3’s 8.5% dive and beating market expectations of a sharper drop. All-in-all, the economy tumbled 6.8% in 2020, contrasting 2019’s 3.3% expansion and logging the worst reading in series history. Looking at the details of the release, Q4’s softer downturn was largely due to an improvement in domestic demand: Household consumption fell at a significantly milder rate of 2.2% year-on-year in Q4 compared to Q3’s 9.0% slide, supported by relatively loose restrictions throughout the quarter. Similarly, the decline in fixed investment moderated, albeit only marginally, still logging a notable 17.1% contraction in Q4 (Q3 2020: -19.1% yoy). Meanwhile, government spending growth picked up pace to 4.0% in the final quarter of the year, up from Q3’s 3.8%.
On the external front, exports of goods and services plunged 20.9% on an annual basis (Q3 2020: -22.1% yoy), amid still-subdued foreign demand. Meanwhile, imports of goods and services slid 15.6%, falling at a markedly milder pace than Q3’s 22.4% freefall.
Lastly, on a seasonally-adjusted quarter-on-quarter basis, GDP expanded 6.0% in Q4, easing from Q3’s 9.4% jump.
Commenting on the outlook ahead, Daniel Velandia and Camilo Durán, analysts at Credicorp Capital, said:
“Mobility has started to bounce since Feb-21 amid lower pressures from the virus, suggesting that the setback was short-lived, at least compared to the previous contagion phases. We maintain a GDP growth forecast of 4.8% for 2021, though this result will be highly sensitive to potential future restrictions on activity should virus pressures intensify again, which in turn is a function of the upcoming vaccination program.”
However, Felipe Camargo, senior economist at Oxford Economics, expects a stronger rebound in 2021:
“National accounts data for Q4 leaves GDP only 3.5% below its pre-pandemic level, just two quarters after a sharp 17% q/q contraction in the Q2 2020 trough. This indicates a 4.8% carry-over into 2021, and we expect a 1.9% increase during the year to bring our 2021 GDP growth forecast to 6.7%. This also implies that quarterly pre-pandemic output levels should recover by Q4 2021, making Colombia one of the first countries to do so, second only to Brazil.”
Our panelists project GDP to expand 4.9% in 2021, which is unchanged from last month’s forecast. For 2022, panelists see GDP growing 3.8%.
Colombia - Investment Data
|Investment (annual variation in %)||2.4||-2.9||1.9||1.5||4.3|
5 years of economic forecasts for more than 30 economic indicators.
|Bond Yield||6.08||0.0 %||Dec 30|
|Exchange Rate||3,287||-0.17 %||Jan 01|
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February 15, 2021
According to preliminary data, GDP contracted 3.6% in annual terms in the last quarter of 2020, moderating notably from Q3’s 8.5% dive and beating market expectations of a sharper drop.
February 12, 2021
Industrial output increased 1.5% compared to the same month of the previous year in December 2020, contrasting November's 0.2% drop and marking the best result since February 2020.
February 8, 2021
The Fedesarrollo consumer confidence index deteriorated significantly in January coming in at minus 20.8, down from December’s minus 10.4 and putting an end to an eight-month streak of improving sentiment.
February 4, 2021
Merchandise exports dropped at a softer pace of 9.0% year-on-year in December 2020, following November’s 14.3% plunge and logging the weakest contraction since February 2020.
February 1, 2021
The seasonally-adjusted Davivienda manufacturing Purchasing Managers’ Index (PMI) jumped to 53.3 in January from December’s 51.8, marking the highest reading since July 2020.