Colombia’s economy grew much faster than expected at the start of the year, with record low interest rates supporting a revival in domestic demand.
Gross domestic product (GDP) expanded 2.9% in the first three months of the year from the previous quarter, more than three times the 0.9% median forecast from analysts surveyed by Bloomberg. GDP rises 1.1% from the same quarter last year, the national statistics agency said.
A month before mass unrest erupted across the nation, the economy was expanding at its fastest pace on record, according to a separate indicator published alongside the GDP report. The monthly economic activity indicator known as ISE registered an 11.8% expansion in March, the fastest since records began in 2006.
Today’s reports show Colombia was rebounding strongly from its deepest ever crash last year. But the outlook for the current quarter is less rosy as social unrest and a new wave of Covid-19 infections hit the country. Central bank co-director Jaime Jaramillo this week described the growth outlook as “grim”.
The first quarter expansion was led by a 17% rebound in construction, and a recovery in the energy sector.
Colombia’s economy will grow 5.2% in 2021, according to an International Monetary Fund forecast published before today’s report. That would be a slower expansion than in Peru and Chile, but faster than in Mexico and Brazil, according to the Fund’s estimates.
Anti-government protesters have blocked highways in recent weeks, disrupting business, hurting confidence and blocking access to Colombia’s main Pacific port. The port authority said Friday that the unrest, which started April 28, has caused more than 11,500 tons of coffee exports to be held up.