The result was in line with market expectations, although at the lower end of projections.
According to data published on Monday by the National Administrative Department of Statistics (DANE), Colombia's Gross Domestic Product (GDP) grew 2% in the third quarter of this year.
The result was in line with market expectations, although at the lower end of projections.
For example, analysts participating in Fedesarrollo's Financial Opinion Survey estimated growth for the quarter to be between 2% and 2.4%, with 2.1% as the median response. Nearly 50% of the analysts surveyed by Banco de la República estimated GDP growth for the third quarter to be between 2% and 2.5%.
What happened in the third quarter?
The 2% growth for the third quarter contrasts sharply with the performance of the economy a year ago, as already mentioned.
But the data for the quarter also raise some doubts. It is worth remembering that the GDP result was below or just below the lower end of practically all projections.
To begin with, DANE revised downwards the data of the Economic Monitoring Indicator (ISE) for July and August, with significant deductions to the values of each month.
In addition, the September figure was the lowest of the three months, at 1.2%. Although this month's figure is not the lowest of the year, it is certainly disappointing in the quarter as a whole.
In a way, it can be said that the anchor (not to say the ballast) in the quarter's results was, precisely, the September data.
The ISE allows us to see the “short-term evolution of the country’s economic activity,” as defined by DANE itself. It is not a measurement of added value. In other words, it should not be confused with the GDP, but it does help to see more frequently how things are going in the economy (since the GDP studies quarters and each report arrives months after the quarter analyzed).
In September, the worst performance was in the mining and quarrying sector, with a contraction of 8.7% and a contribution to the ISE for that month of 0.6%.
The ISE result in September is also reflected in the total GDP for the quarter, in which mining and quarrying recorded a result of -7.1%, when a year ago it had been in positive territory, with 4.2%.
While this sector was the main drag on GDP in the quarter, agriculture was the main driving force of the economy in this period, with an expansion of 10.7%, which contrasts significantly with the result of a year ago, when it stood at 1.1%.
What is expected for Colombia's GDP by 2024?
It is worth remembering that last year saw disappointing and even worrying economic results, with annual GDP reaching a meager 0.6%, below practically all projections (including the most pessimistic ones).
However, 2024 has marked a more dynamic pace, with positive results in the three quarters so far.
This has led virtually all market players, as well as some institutions, to raise their growth projections for the whole of 2024.
At this point, the Ministry of Finance projects an annual GDP growth of 1.7%, while the Bank of the Republic puts it at 1.9%. Likewise, the World Bank has projected an expansion of 1.5% for the end of this year.
It is important to clarify that these projections are prior to the publication of GDP by DANE this Monday and are subject to revisions.
