Construction boosts Colombia's economy

The Colombian economy grew much faster than expected last quarter as construction spending soared and the agriculture and mining sectors rose at a healthy pace, according to data released by the government thursday.

Economic expansion in the third quarter was 5.1% compared with the same quarter a year earlier, the government statistics agency Dane said. 

That is the strongest quarterly growth rate since the first quarter of 2.012 and beats the average 4.3% expansion rate economists were expecting.

Compared with the second quarter, the economy grew 1.1% in the third quarter, which works out to an annualized rate of 4.5%.

Activity in the construction sector jumped 21% last quarter compared with the third quarter of 2.012, while agriculture grew 6.6% and mining and oil rose 6.1%. 

On the negative side, the manufacturing sector continued to suffer, registering a 1.0% contraction last quarter.

Colombian Finance Minister Mauricio Cardenas earlier this week predicted the third-quarter growth figure would beat expectations, after he saw some preliminary data.

Colombia's oil driven economy experienced a slowdown in late 2.012 and early 2.013, leading many economists to predict it would continue to slide, following the path of neighboring Brazil. 

But the deceleration was rather short-lived as the government began investing heavily in infrastructure spending, and a growing middle class that has continued to increase its spending habits amid a falling unemployment rate.

Still, there are lingering concerns about the health of Colombia's economy. 

Despite the strong economic data, the country's stock market is 11% lower this year, while the country's currency has fallen about 10% in 2.013. 

Also, this year has seen a wave of popular street marches and violent protests by farmers and other labor groups that say stronger economic growth data isn't trickling down to help the poorer segments of society.

The strong growth data is likely to dissuade Colombia's central bank, whose board members meet Friday for the year's final meeting, from cutting interest rates that are already near an all-time low.

The bank board had left its key rate at 3.25% for eight straight months but decades-low consumer inflation, which is at 1.76% through the past 12 months, led some board members to propose one more rate cut to increase bank borrowing to spur demand. 

But the data out thursday suggests more monetary stimulus isn't necessary.

The data also revised down second-quarter on year growth to 3.9% from 4.2%.