The country’s economy began the second quarter of 2024 with a surprising increase of 5.5%

The country’s economy began the second quarter of 2024 with a surprising increase of 5.5%
The country’s economy began the second quarter of 2024 with a surprising increase of 5.5%

The Economic Monitoring Indicator, ISE, scored 120.3 in April and had an annual rebound of 5.5%being the most important increase reported in 20 months.

The long-term curve shows that economic activity in the country had a better performance compared to the same month last year, when it contracted 1%, but It is not close to the expansion it had in April 2022 (10.4%).

However, when reviewing this report, José Ignacio López, president of Anif, said that it is a “positive surprise.” and highlighted the behavior of primary activities, which include agriculture and hydrocarbons, whose expansion was 10.2% annually.

Primary activities stand out a lot. We know that oil production in April was marked by a good pace and in agriculture there are some crops that have been performing well. Concerns about the configuration of a La Niña Phenomenon will weigh on the prospects of this sector for the remainder of the year,” the analyst noted.

Another striking fact has to do with secondary activities (industry and construction), two sectors that have been facing difficulties in the current cycle of deceleration and, After thirteen months, they had a positive variation of 2.8%.

Despite the rebound, the president of Anif went deeper and indicated that ““It does not constitute a complete trend and, therefore, until we have the May figures, we will not know how persistent the recovery is.”

Bruce Mac Master, president of Andi, mentioned that “in this growth scenario, compared to the stagnation registered in the first quarter of the year, It is necessary to continue to be attentive to the signals sent by the productive apparatus to set us firmly on the path of investment. and the creation of new jobs, given that the results delivered between January and April continue to be insufficient to meet the economic and social needs that Colombia has”

Seasonally adjusted analysis

Luis Fernando Mejía, director of Fedesarrollo, highlighted the growth that the ISE had for April. However, He noted that it was influenced by a calendar effect, since, this year, Easter was celebrated in March, while in 2023 it fell in April.

By removing that season and holidays from the analysis, he noted that The growth was 4% annually, but it still exceeded market expectations.

He also stated that “an important part of the observed dynamics is due to the behavior of the public sector and social services, which had an annual growth of 12.7% in that month.” And he pointed out that, Without considering this sector, the growth of the economy in April was 2.5%, a figure that also shows an acceleration compared to what was observed in the previous four months.

In this same analysis of the seasonally adjusted figures, he noted that “The contraction of three key sectors for the Colombian economy continues, which explain almost a third of productive activity: industry and construction (-0.1%) and commerce (-0.6%).”

The expert then assured that the economic reactivation “it will have to go inexorably through an improvement in the numbers in these three important sectors.”

Both the manufacturing and building areas have been experiencing declines in sales for several months and are a cause for concern, precisely because of their weight in the economic dynamics. The unions that represent them, Andi and Camacol, have insisted that plans are needed to reactivate them.

Good sign

Julio Romero, chief economist of economic research at Corficolombiana, pointed out that “It is positive that most sectors are accelerating their growth rate and that marks an expectation that the economy will now begin to have a more forceful concrete rebound.”

“We are still talking about growth that is low, but we are no longer close to contractionary territory.”. AND It is important to give a margin of waiting to see if this recovery consolidates and if, in addition, a greater rate of growth can be observed,” he added.

The expert mentioned that, for now, his team is not reviewing the growth forecast for this year, of 1.3%: “But with the data through April, we do have an upward bias and we are watching to see if we materialize it quickly“, said.

The expert agreed that construction, industry and commerce have pending better performance. Although the seasonally adjusted data recorded negative growth, Romero highlighted that “they are less negative compared to previous periods.”

 
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