The Colombian economy has grown a meager 0.3% in the last quarter of 2023, as reported this Thursday by the National Administrative Department of Statistics (DANE) in a press conference. This avoids falling into a technical recession, which would have occurred if the figure were negative again for the second consecutive quarter – between July and September the economy contracted 0.6%. However, the numbers for the most recent period imply a decrease of 1.9 percentage points compared to the growth figures for the last quarter of 2022, which had been 2.2%. With these data, 2023 closes with an increase in the Gross Domestic Product (GDP) of 0.6%, the lowest number in the last two decades if 2020, a year marked by the pandemic, is excluded.
The category that has grown the most in the last quarter is agriculture, livestock, hunting, forestry and fishing with values of 6%. This is followed by financial activities and insurance (5.5%) and the section on public administration, defense, education and health (3.8%). On the other hand, the largest falls occurred in manufacturing industries (-4.8%) and in artistic, entertainment and household activities (-3%). The director of DANE, Piedad Urdinola, explained during the press conference that this last sector faces a “base effect” in reaction to the unusually high increase of 34.4% that it had between October and December 2022.
Annual figures
The 0.6% annual growth is made up of a category breakdown that has some differences from the last quarterly analysis. If the data for the entire year are taken into account, the sectors that grew the most were the financial and insurance sectors (7.9%) and artistic, entertainment and household activities (7%). At the opposite extreme are construction (-4.2%) and manufacturing industries (-3.5%).
DANE has also reported on the revisions it has made to the numbers for the first three quarters of 2023. The adjustments were residual, but in all cases the growth was less than what the entity initially said. The Colombian economy registered an expansion of 2.9% in the first quarter, 0.1% in the second and a contraction of 0.6% in the third. The original data were 3%, 0.4% and -0.3%, respectively.
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The figures, furthermore, are lower than those anticipated by international and national organizations. The International Monetary Fund (IMF) and the Organization for Economic Cooperation and Development (OECD), for example, had calculated an increase of 1.4% of GDP. Colombian entities such as the Bank of the Republic, the Bank of Bogotá and Fedesarrollo had predicted a growth of 1%.
Projections
The DANE figures are known after the growth projections that have been made for this year and which also generate concern. An expansion of the economy is estimated at 1.5%, as revealed in January by the Minister of Finance, Ricardo Bonilla. This, according to experts, is not enough to revive investment, boost employment rates and increase tax collection, which in 2023 closed with numbers lower than expected. Bonilla has warned that there will be a deficit of 15 trillion pesos (about $3.84 billion) if the economy continues to stagnate and collections only increase at the rate of inflation.
Risk rating agencies have shown their concern. There are no longer growth figures of 10.6% or 7.5%, as in 2021 and 2022, that compensate for the high levels of debt. A couple of weeks ago, the US agency S&P lowered the country's credit outlook from “stable to negative.”
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