Improved growth for Colombia

It looks like Colombia’s economy is coming back to the boil.

Official growth figures for the third quarter show that the economy grew 5.1 per cent, compared with the same quarter a year earlier, beating the consensus forecast of 4.3 per cent.

The improved growth between july and september came on the back of a boost in the construction sector and expansion in agriculture as well as mining, but manufacturing was still disappointing.

This is the fastest acceleration since the first quarter of 2012 and, versus this year’s Q2 growth which was revised down to 3.9 per cent from 4.2 per cent, the economy expanded 1.1 per cent.

Colombia’s Q3 growth, then, is higher than Peru’s 4.4 per cent and Chile’s 4.7 per cent in the same quarter.

For Munir Jalil, chief economist with Citi in Bogotá, this expansion could bring the economy closer to the government’s forecast of 4.5 per cent for the year. 

“They have one quarter growing at 5 per cent, they just need another one,” he said.

Although the Colombian economy has slowed since 2.011 when it reached growth of almost 6 per cent, it still stands among the fastest in Latin America, and the government as well as the central bank have been taking measures to boost output and encourage spending.

“We are on the right path. 

The adopted measures have given very good results,” finance minister Mauricio Cárdenas tweeted after numbers were released.

(Still, despite healthy data, this has been a year during which farmers and others protested, demanding that economic growth reach them as well.)

Following thursday’s GDP numbers, all eyes will now be on friday’s interest rate announcement. B

ased on Q3 results, Colombia’s central bank is quite likely to hold its benchmark lending rate firm at 3.25 per cent for a ninth straight month.