Recent data from Colombia’s national statistics authority, DANE, reveals a complex economic situation.
It shows the manufacturing industry and preliminary GDP indicators offer mixed signs about the economy’s strength.
Grupo Bancolombia analyzed the data. They found that industrial production is weakening. This decline is due to less demand for goods and the economy’s slow growth.
In 2022, 32 out of 39 industrial segments contracted. Food, clothing, hardware, and basic industries saw reduced production.
However, the refinery sector remains strong. Andrés Langebaek, an expert from Grupo Bolívar, commented, “Our growth projection is 1.1% for this year.”
He noted that the data aligns with this expectation. He also pointed out some positive trends in annual trade variations.
An economist at Davivienda highlighted positive last-month data of 2023 from the PMI. But, there are concerns.
DANE revised the third quarter’s growth downwards. This suggests Colombia might have experienced a mild technical recession in 2023.
Agro-industrial production is facing a decline. Coffee milling dropped by 6% annually amid lower export volumes and fluctuating international prices.
Dairy products, cooking oils, cocoa derivatives, and sugar production also saw significant declines.
Coffee sector gave a notable boost
Camilo Pérez from Banco de Bogotá views the data as a sign of a major economic slowdown.
He acknowledged some positive aspects in November 2023. These, he suggests, result from government action and increased spending.
The coffee sector gave a notable boost, but Pérez sees this as an isolated effect. He believes the broader data still points to economic fragility.
President Gustavo Petro, however, interprets the data optimistically. He views it as evidence of Colombia’s path to sustained economic growth.
Daniel Velandia from Credicorp Capital concurs that the last quarter of 2023 showed strong public expenditure.
This has made the data appear more favorable. He observes recovery in primary sectors like agriculture.
However, the service sector dominates the economy and is progressing slowly. Velandia anticipates significant public spending in the coming year.
This, he says, will be a growth driver. Yet, he remains concerned about the 24% fall in investment in 2023.