POLL-Colombia economy expected to grow 12% in Q3


Band Nelson Bocanegra

BOGOTA, November 12 (Reuters)Analysts forecast Colombia’s economic growth in the third quarter of 12% from the period a year earlier, citing a boost in strong domestic demand as normalcy returns following the worst of the pandemic, A Reuters poll revealed Friday.

However, the projected growth of the Andean country’s gross domestic product (GDP) will be lower than the surprising 17.6% expansion recorded in the second quarter of the year.

The median estimate of the 19 analysts is slightly lower than that of Colombia’s central bank, which forecasts economic growth of 12.7% in the three months to September 30.

“Overall, there are good results from manufacturing, retailing and the recovery of the primary sector which includes agriculture, coal and petroleum, which have seen some progress,” said Camilo Perez, Chief Economist of Banco de Bogota Bank.

“However, there is a big problem, which is the construction,” he said.

The government statistics agency DANE will release third quarter GDP results on Tuesday, November 16.

The forecast for economic growth this year also rose to 9.25%, down from 6.8% in a previous poll in August. Analysts are also now forecasting GDP growth of 4% in 2022, down from a previous estimate of 3.7%.

The government and the central bank recently raised their GDP growth estimates for the year to 8.5% and 9.8% respectively.

Colombia’s economic recovery, combined with rapidly growing inflation that reached 4.58% in the 12 months to October – well above the central bank’s 3% target – are contributing to the decision by the monetary policy authority to increase the benchmark interest rate.

The bank raised the interest rate in September and October by 25 basis points and 50 basis points respectively, to a current level of 2.50%.

(Reporting by Nelson Bocanegra Written by Oliver Griffin Editing by Alistair Bell)

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