GDP results boost year-end growth expectations

On Monday, the Dane disclosed the results of the gross domestic product for the first quarter of the year. The growth of the economy showed an increase above expectations, reaching 8.5% for the period and With what is considered the third highest growth among OECD countries.

Colombia’s result takes the growth scenario as a comparative basis, given that it grew by 1.2% in the first quarter of 2021. For this reason, its behavior is better than that of other countries, whose primary impact is greater given that it came from negative data.

Colombia is below Portugal (11.9%) and the United Kingdom (8.7%), which experienced negative growth in the first quarter of 2021.. In the case of Portugal, its economy contracted by 3.3% and the United Kingdom by 1.5% from this period last year.

This led to a good result Analysts should consider that the data at the end of the year may be higher than initial expectations. “We are convinced that the economy will certainly grow over the course of the year above 5% “Even analysts and even the government consider that the economy could grow above 6%, and the relevant economy is starting to emerge in this latest forecast,” said Sergio Olarte, chief economist at Scotiabank Colpatria.

specially, Banco de la República raised its year-end forecast in its latest monetary policy report, rising to 5% From the first projection 4.3%. Now, the national government has also reported that an adjustment to its forecast is possible.

“Certainly in the fiscal framework that we will present, we will review the growth rate. We will be the second economy in the world with the highest growth rate,” Finance Minister Jose Manuel Restrepo told La FM newspaper.

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Although there are factors that could dampen this growth, such as higher bank rates and higher inflation, there are still good numbers for private consumption, which continues to drive growth. Restrepo emphasized that the real intervention rate remains negative, which is subject to growth.

He also emphasized that the IMF expects the country to grow above the average for the region and by the end of the year puts it at 5.8%.She “stands out in the international context”.

Specifically, Mauricio Hernandez, an economist at Bbva Research, They highlighted that although they maintained their forecast at 4.5% for this year, although they consider this result to generate an upward bias After these results.

Juan Pablo Espinosa, director of economic research at Bancolumbia, noted that in fact, because the result is higher than expected, it generates an upward bias. “Our base scenario is 4.7% for the year and after publication we set this number as the lower bound and upper range scenario at 6%.”.

This was confirmed by the end of the second semester We expect growth to slow influenced by The country’s political panorama, monetary policy decisions and inflation will encourage savings at the expense of consumption.

For his part, Hernandez also considered that as the second semester approaches, the economy will tend to slow its growth. The Minister agreed on this point although it will remain in good shape.

This negative bias resulting from higher rates and higher inflation will primarily affect private consumption, although Olarty sees it as not a strong enough weight to moderate this growth.

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