Colombia: economy to continue to improve - Wells Fargo
The Colombian economy improved its performance in Q3, but the details are still showing a relatively weak economy according to analysts from Wells Fargo. They expect the economy to continue to improve in the short to medium term.
“Although Colombian GDP rose in Q3 compared to the second quarter, the domestic economy was a bit weaker than expected with domestic demand growing just 1.6 percent compared to 1.9 percent during the previous quarter.”
“Personal consumption expenditures (PCE) were up 1.7 percent during the year while government consumption surged 3.9 percent, both on a year earlier basis. However, the weakness in economic activity was fundamentally reflected by the performance of gross fixed capital formation, which increased only 0.2 percent on a year-earlier basis compared to 1.2 percent in Q2. Another important contributor to the economy during the quarter was real exports of goods and services, which rose 4.5 percent versus a year earlier. Exports of goods and services grew 1.3 percent sequentially. Imports, which enter the GDP calculation with a negative sign, increased 2.5 percent, down from a 3.3 percent increase in Q2. On a quarter-on-quarter basis, imports increased 0.6 percent.”
“Much of the weakness in investment was due to a 15.8 percent plunge in construction investment, while investment in transportation equipment dropped 5 percent. Meanwhile, investment in public works increased 8.9 percent while investment in machinery and equipment did so by 6.4 percent, year over year, counteracting the strong decline in construction investment.”
“Thus, although the Colombian economy improved its performance in Q3, the details are still showing a relatively weak economy. We expect the economy to continue to improve in the short to medium term.”