Colombia’s Economic Growth Forecast

By Nelson Bocanegra

BOGOTA (Reuters) – Colombia’s economy is expected to grow 2.2% in the second quarter of 2024 compared to the same period last year, according to a Reuters poll.

If this median estimate from 10 analysts holds true, it would signify a notable acceleration from 0.1% annual GDP growth in the second quarter of 2023 and 0.7% in the first quarter of 2024. This growth is also higher than the central bank’s forecast of 1.8% for the three months ending in June.

Analyst estimates varied from 1.1% to 3%. Sergio Olarte, Scotiabank’s chief economist for Colombia, mentioned, “In general, the economy seems to have bottomed out and we have a very gradual recovery,” attributing the growth to the agricultural sector and increased government spending.

The government’s DANE statistics agency will release second-quarter GDP data on Aug. 15.

However, Olarte warned that sustained growth is uncertain, citing “defensive” household spending and flat investment. Colombia’s economic growth has also been impacted by a high benchmark interest rate of 10.75% and stubborn inflation, currently at 7.18%, significantly above the central bank’s 3% target.

For the second quarter of 2024, the economy is projected to expand 0.81% compared to the first quarter.

Analysts now anticipate that Latin America’s fourth-largest economy will grow by 1.5% this year, an increase from 1.3% in the previous survey. For 2025, GDP growth is expected to remain steady at 2.6%.