Colombia Q2 economic growth seen at 2.2% from year-earlier period

Colombia’s economy is forecast to have grown 2.2% in the second quarter of 2024 from the same period a year earlier, picking up pace from the first three months, a Reuters poll showed on Thursday.

If the median estimate from 10 analysts is realized, it would represent a significant acceleration from Colombia’s 0.1% annual GDP growth in the second quarter of 2023 and the 0.7% recorded in the first quarter of 2024. It would also be higher than the central bank’s forecast of 1.8% for the three months to end-June.

Analysts’ estimates ranged from 1.10% to 3%.

“In general, the economy seems to have bottomed out and we have a very gradual recovery,” said Sergio Olarte, chief economist for Colombia at Scotiabank, adding that the agricultural sector’s performance and increased government spending may have contributed to the growth.

The government’s DANE statistics agency will publish second-quarter GDP data on Aug. 15.

“However, we aren’t thinking that this data from the second quarter will continue to be seen for the rest of the year,” Olarte cautioned, citing “defensive” household spending and flat investment.

Colombia’s economic growth has been affected by a high benchmark interest rate, currently 10.75%, as well as by stubborn inflation, which stood at 7.18% for the 12 months to end-June, well above the central bank’s 3% target.

The economy was forecast to expand 0.81% in the second quarter of 2024 versus the first.

Analysts now see Latin America’s fourth-largest economy growing by 1.5% this year, up from 1.3% in the previous survey. For 2025, analysts continue to see GDP growth at 2.6%.