Colombia | Economic growth showed outstanding dynamics at year-end 2021

In 2021, GDP grew 10.6% over 2020 and 2.8% respect to 2019, driven mainly by final consumption. Fixed investment, although it expanded above GDP, still failed to regain its pre-pandemic levels. We maintain our 2022 growth forecast at 4.0%.

Key points

• Key points:
• In the fourth quarter, the economy grew 10.8% YoY. In addition, the expansion with respect to the third quarter of 2021 was 4.3% QoQ.
• In the full year 2021, household consumption increased 14.6% YoY, in real terms, and stood at 113% of the pre-covid level at the end of the year. On the contrary, fixed investment, at the end of 2021, was 12% below pre-covid levels.
• The high household spending was explained by: higher income generated by the recovery of employment during 2021, savings generated in 2020 and spent in 2021, lower savings generated in 2021, and the progressive acceleration of consumer credit.
• In 2022, final consumption will slow down, both in its private component (households) and as explained by government spending. On the contrary, investment in construction, especially civil works, and exports will continue to accelerate.
• On the 2022 growth forecast, there are two biases that seem, for now, to offset each other: a better than expected start to the economic data and higher inflation and interest rates that could affect growth in the second part of the year.

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