New data from the National Administrative Department of Statistics (DANE) reveals a 0.78% year-on-year decrease in Colombia’s economy in April.
This shift signifies the first recorded economic decline in the past two years, highlighting a slowdown in the country’s productivity.
The DANE’s Monthly Economic Activity Indicator (ISE), a synthetic index that measures short-term economic evolution, revealed the downturn.
The secondary sector, encompassing manufacturing and construction, saw the most substantial annual decrease, at 6.83%.
Primary activities like mining and agriculture also fell by 2.91%. On a positive note, the services sector (tertiary) witnessed a 0.79% growth compared to April 2022.
Scotiabank Colpatria’s Chief Economist, Sergio Olarte, pointed out that despite the marginal expansion in the services sector, there is a discernible slowdown, especially in retail trade.
He attributed this to high interest rates, discouraging debt acquisition, and thus affecting consumption and business financing.
In addition, high inflation rates are influencing households to focus on essential purchases rather than luxury or non-essential goods.
These ISE figures suggest a deceleration process in the Colombian economy, with the statistical base effect also impacting growth.
The Finance Minister, Ricardo Bonilla, projected that the economic slowdown will bottom out in 2023.
He envisaged a recovery by 2024, with a return to a medium-term growth path, contingent on strategies to reindustrialize the country and bolster the agricultural sector to diversify the economy.