Colombia | Clearer signs of a slowdown in economic growth

Summary

GDP grew 7.5% in 2022, driven by domestic demand, especially services consumption and machinery investment. In the fourth quarter, the economy grew 2.9% annually, confirming the slowdown that was anticipated and will continue this year. BBVA Research estimates growth of 0.7% for 2023.

Key points

• Key points:
• The economy showed signs of deceleration: (i.) domestic demand fell in quarter-on-quarter terms at year-end, explained by lower private consumption and the strong deterioration of public consumption; (ii.) exports of goods declined in the last quarter, reflecting the slowdown in the global economy; and (iii.) there was an unusual accumulation of inventories at year-end, which is related to cycles of economic moderation. As a result, the sectors most related to the production and commercialization of goods (agriculture, mining, industry, commerce) and construction had marked slowdowns at the end of the year.
• For 2023, BBVA Research expects a growth of 0.7%, which means a notable deceleration with respect to last year's result. The signals of the 2022 growth result are in line with this estimate. In addition, other recently released economic data confirm the weakness of economic activity at the beginning of 2023.
• Our real-time indicator for measuring household consumption, measured through big data techniques, shows continued weakness in goods consumption, while spending on services remains positive.

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