Colombia is, after Chile, the fastest growing economy in South America

RIO DE JANEIRO, BRAZIL – The Colombian economy grew by 5.7% in the third quarter compared to the previous quarter and by 13.2% compared to July-September 2020, which places it behind Chile, the region’s economy with the highest growth, Colombian authorities highlighted Tuesday.

“We are seeing a quarter-on-quarter growth between the third quarter and the second quarter of 2021 of 5.7%, compared to the contraction we had observed in the second quarter of 2021,” explained this Tuesday in the presentation of financial results the director of the National Administrative Department of Statistics (DANE), Juan Daniel Oviedo.

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The Colombian economy was coming from a quarter of contraction of -2.8%, motivated mainly by the restrictions of the third peak of the pandemic and by the manifestations of the national strike that affected the economy between April and June.

“We record with enormous pleasure and a large dose of optimism the recent result of the growth rate of the Colombian economy in the third quarter,” appraised the Minister of Finance, José Manuel Restrepo.

ANNUAL AND PROJECTED GROWTH

The minister highlighted that “the first nine months of the year show a double-digit growth rate with respect to last year, a historical figure, 10%”, and added that growth is accompanied by job creation: “88% of the jobs lost in the pandemic have been recovered”.

This growth in 2021 “compensates for the contraction of the first nine months of 2020, of -8.1%”, Oviedo estimated.

“Recall that in 2020 we had observed a GDP contraction of -6.8% that has been accompanied by annual growth for the first quarter of 1%, for the second quarter of 17.6%, and the second quarter of 2021 of 13.2%,” he highlighted.

This last data that Oviedo points out, which comes from comparing it with the third quarter of 2020, makes Colombia appear “as the second highest economy in the region with a growth dynamic with 13.2%, after Chile’s in August, which was 19.1%”.

“When we compare ourselves with other OECD countries of the world, Colombia has a growth rate more than double in this quarter with respect to other countries and also more than double comparing the last quarter with the immediately preceding one,” added Minister Restrepo. Furthermore, this growth exceeds pre-pandemic levels, when the economy was growing at 3%.

He also stated that “this is a demonstration that Colombia is today an example of economic reactivation before the world, showing what Colombians are capable of when we face times of adversity.”

At the beginning of November, Colombian President Iván Duque raised the country’s economic growth expectations to over 8.5%, compared to the 7% projected in October.

KEY SECTORS

Growth in the third quarter was driven mainly by the commercial sector, vehicle repair, transport and storage, accommodation, and food services, which expanded 15.6%, especially in September, which saw “a significant correction in the pace of economic recovery”.

The manufacturing industry also contributed to the growth, which grew 13.2%, and professional, scientific, and technical activities and administrative services (+5.3%).

“Not only the sectors that were already reacting, such as commerce, hotels, public administration, and the financial sector, grew significantly, but in September there was a very good reactivation of sectors such as construction and mining, especially in coal, helped by high international coal prices,” said the chief economist of Scotiabank, Sergio Olarte.

The DANE director pointed out that there was “a significant change of trend in construction” between August and September, where there is a growth in buildings, especially in middle and low neighborhoods, but a decrease in the civil works sector.

Likewise, there was “a slowdown in the growth rate” in the agricultural sector, associated with the decrease in the production of some types of coffees, which has caused the growth in this sector to be negative (-1.1%) between the two quarters.