Colombia Q1 economic growth forecast at 7.5% - Reuters poll

Reuters

Published May 13, 2022 01:20PM ET

By Nelson Bocanegra

BOGOTA (Reuters) - Colombia's economy could have grown by 7.5% in the first quarter of 2022 versus the year-earlier period, mainly boosted by domestic consumption, though this will begin to moderate amid inflationary pressures, a Reuters poll revealed on Friday.

Estimates from 13 analysts for economic growth fluctuated between 6% and 8.30% in the three months ended March 31.

If growth is in line with the poll's median forecast of 7.5%, Latin America's fourth-largest economy will have expanded at a slower rate than in the prior quarter ending Dec. 31, when growth hit 10.8%.

"The good dynamics of domestic demand, the high terms of trade and expansionary monetary policy could have contributed to growth during the first three months of 2022," David Cubides, director of economic research at stock brokerage Alianza, said.

"However, looking ahead to the following quarters, the rise in inflation, tighter financial conditions abroad and the increase in the monetary policy rate would lead growth to gradually moderate," he added.

The analysts also forecast that the Andean country's gross domestic product will expand by 5.25% this year, before growth slows to 3% in 2023.

Last year Colombia's economy grew by a historic 10.6%, versus a weak comparative period in 2020.

The forecast cooling is partly explained by Colombia's central bank opting to hike its benchmark interest rate, which it has raised by a total of 425 basis points since September last year, to 6%, its highest level since May 2017.