The fall in the Gross Domestic Product, GDP, by 0.3% for the third quarter of 2023 surprised downwards, as it was less than what analysts and unions expected. Now, with a growth of 3% for the first quarter, 0.4% for the second and -0.3% for the third, the economy should have a variation of between 0.9% and 1% in the fourth period to be able to close the entire year with 1%, according to analysts.
This newspaper consulted with several analysts about the data with which the year should close for the economy to grow at least 1%. Grupo Bolívar calculated 0.9%, Banco de Bogotá 1%, Alianza Valores 1%, Scotiabank Colpatria 1% and Itaú 1%.
The data surprised the decline
The Government was optimistic about what the data analyzed and published by the National Administrative Department of Statistics, Dane, last Wednesday would be. In advance of publication, The Minister of Finance, Ricardo Bonilla, had indicated that it was expected that the economy would have already hit rock bottom, but hours after knowing the data he confessed that it was “very bad.”
“The report that Dane is providing is really bad. This means that we are still feeling the processes of economic slowdown,” Bonilla mentioned.
He took advantage of his intervention at the Findeter congress in Cartagena to outline what must happen to reactivate the economy, which involves reducing the interest rate – currently at 13.25% – to boost key sectors such as construction and housing.
“We must work on the recovery of the economy and that involves civil works and housing, and for industrial activity to become dynamic again,” said the head of the Treasury portfolio.
With the economic scenario under observation, Economic analysts and other public figures have begun to mention what the expectations are for the Colombian economy in the last three months of 2023.
One of these voices was Leonardo Villar, manager of the Banco de la República. The manager emphasized that the entity changed its economic outlook for the end of the year, after learning of the decline in the economy in the third quarter. Promptly, Villar assured that the projection went from 1.2% to 0.9%, which roughly equivalent to only 1%. “For productive activity as a whole, the Bank’s technical team expected low growth in the third quarter, around 0.4%, but the Dane data showed us a contraction of 0.3%,” he mentioned.
In that sense, Villar acknowledged that with the negative surprise, the full year would not reach the 1.2% figure projected in the October Monetary Policy Report. “possibly it is closer to 0.9%”, a figure that the entity’s technical team already contemplated a few months ago.” Economic analysts are already providing their forecasts on how much the economy can recover in the last quarter of 2023.
The Bancolombia Research Group considers that there is currently downward pressure on the growth outlook of 1.2% for the entire 2023. And, although they point out positive features that can help the GDP rebound in the fourth quarter, they are emphatic in ensuring that this last period will be controlled by what happens with interest rates in the Issuer’s next decision.
“It should not be lost on the radar that we are going through a situation where what will dominate will be a modest evolution of private demand “which will only begin to react as the monetary policy stance of the Bank of the Republic begins to become less contractionary,” the entity mentioned in an analysis.
Carolina Monzón, Research Manager at Itaú, stated that the entity considers that the Colombian economy should grow by exactly 1%. to have growth like that expected by the Bank of the Republic in the update of its macro forecasts.
“We expect growth of 1.0% this year, with downside risks. The weak figures for the third quarter of 2023 consolidate the prospects for weakening domestic demand in a context of contractionary monetary policy and little confidence in the private sector,” Monzón noted.
Camilo Pérez, Research Manager at Banco de Bogotá, said that “in terms of annual growth it should grow a little less than 1% and that would be enough.” the analyst mentioned.
Alianza Valores and Scotiabank Colpatria also agree on a projection of 1% for the last quarter of 2023 to reach 1% for the full year. “We expect growth very close to or even below 1%, this in the midst of three weak quarters of economic activity and with not very encouraging signs for the last one,” mentioned David Cubides, director of Economic Research at Alianza Valores. Andrés Langebaek, from Grupo Bolívar, mentioned that they expect a growth of 0.9% so that the economy closes at 1%.