Colombia Grew Slightly As Expected In Q1 2024, Confirming A Long Road To Recovery

• On Wednesday, May 15, 2024, the Colombian government statistics agency, the National Administrative Department of Statistics (DANE), released historical data revisions and preliminary Q1’24 data. The preliminary results showed that real GDP growth in Q1 2024 came in at 0.7% y-o-y growth, compared to Fitch’s expectations of 0.5% and consensus of 0.1% y-o-y.
• Positive contributions came from aggregate consumption (0.4%) and exports (0.7%), which contributed 0.1 and 0.3 percentage points (pp), respectively, to headline growth. In comparison, the steep contraction in imports (12.9%) represented a positive 3.2pp contribution to headline GDP.
• On the flip side, there was a continued contraction in gross capital formation (13.4%), representing a 2.9pp deduction from the headline Q1 2024 GDP. In seasonally adjusted terms, Q1 2024 saw a real GDP growth of 1.1% q-o-q.
• With the Q1 2024 print broadly in line with expectations, Fitch maintains its forecast of 1.3% annual growth in real GDP terms, as tight policy and high inflation will still hinder growth below the economy’s potential.
• Indeed, there are signs that the economy is facing some headwinds going forward as the seasonally adjusted monthly economic activity indexes show contractions in February (-0.4 m-o-m) and March (-0.8%). That said, Fitch believes there are risks to the upside, as looser policy from the Banco Central de la Republica (BanRep) could spur stronger economic growth than Fitch is currently predicting.

(Source: Fitch Solutions)