Colombian economy grew 13.2% in the third quarter, beating market expectations

Band Nelson Bocanegra and Carlos Vargas

BOGOTA, November 16 (Reuters)The Colombian economy grew 13.2% in the third quarter of 2021 compared to the period a year earlier, the government said on Tuesday, a figure higher than analysts’ forecasts.

Analysts said in a Reuters poll last week that the Andean country’s gross domestic product (GDP) would rise 12%, citing robust domestic demand and a good recovery in all sectors, including manufacturing and retailing.

The expansion stands in stark contrast to the 8.4% contraction seen between July and September last year, when Latin America’s fourth-largest economy struggled under the weight of measures to curb the spread of the coronavirus.

Since September, Colombia’s central bank has entered a cycle of interest rate hikes amid a faster-than-expected economic recovery and rising inflation.

The monetary policy authority raised the benchmark interest rate by 25 basis points in September and 50 basis points in October, bringing it to 2.50% currently, after keeping it at an all-time low of 1.75% since September 2020.

The expansion in the third quarter was led by the commerce, creative and manufacturing sectors, which grew by 33.8%, 32% and 18.8% respectively, the government statistics agency DANE said. .

The finance, real estate, agriculture and construction sectors grew only 2.1%, 2.0%, 1.3% and 0.8%.

The economy grew 5.7% from the second quarter of 2021, DANE added.

Analysts’ median forecast in the Reuters poll was just below the central bank’s estimate for third-quarter GDP growth, which the monetary authority set at 12.7%.

The Colombian economy is expected to grow 9.25% this year according to analysts, while the technical team at the central bank increased its GDP forecast for the whole year to 9.8%, from 7.5% previously .

The government forecasts economic growth in 2021 of 8.5%.

(Reporting by Nelson Bocanegra and Carlos Vargas, written by Oliver Griffin, edited by William Maclean)

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