42860
Colombia GDP Slowest Since 2009
World Economy

Colombia GDP Slowest Since 2009

Colombia’s economy grew at the slowest pace since 2009 in the first three months of the year as consumer confidence slumped and prices fell for the nation’s oil, coal and coffee. The weaker-than-expected result caused bond yields to drop as traders pared bets on further interest rate increases.
Gross domestic product expanded 2.5% from the year earlier, compared with a revised 3.4% in the previous three months, the national statistics agency said Friday in Bogota. The figure was below the 2.8% median forecast of 31 analysts surveyed by Bloomberg. From the previous quarter, GDP grew 0.2%.
Nine interest rate increases since September have damped demand as the central bank attempts to curb the fastest inflation in 15 years without causing growth to crash. Over the past week, three members of the bank’s committee have signaled that the phase of monetary policy tightening may now be nearing its end. The economy will grow 2.5% this year, the bank forecast in April.
“The GDP report surprised some,” said Daniel Escobar, head analyst at Global Securities brokerage in Bogota. “Traders are betting we might not see any more rate hikes from the central bank.”
Colombia’s local peso bonds due in 2018 extended a rally after the report, with yields dropping 0.08 percentage point to 7.04%. At their May board meeting, policy makers limited the interest rate increase to a quarter point, as evidence grows that the economy is cooling faster than expected.
Escobar expects the central bank to raise the policy rate a quarter point to 7.5% this month and keep it at that level for the remainder of the year.

  2 Sectors Growing
The slowdown was led by oil and mining, which contracted 4.6%, while agriculture expanded 0.7%, despite the boost farmers have got from the weaker peso. The fastest growing sectors were industry, which expanded 5.3%, and construction, which gained 5.2%.
Still, among Latin America’s major economies, Colombia’s economy is performing well. While Peru’s economy grew 4.4% in the first quarter from a year earlier, Mexico expanded 2.6%, Chile grew 2% and Brazil contracted 5.4%.
S&P Global Ratings changed Colombia’s rating outlook to negative this year, saying growth prospects have deteriorated amid the tumble in oil prices, while Moody’s Investors Service affirmed the country’s Baa2 rating and stable outlook.
Consumer-price inflation accelerated to 15-year high of 8.2% last month, according to analysts surveyed by Bloomberg, as a weaker peso pushed up import costs and the most severe drought in decades increased food prices. The central bank targets inflation of 3%, plus or minus one percentage point. The statistics agency will publish its May inflation report on Saturday.
The price of crude, Colombia’s biggest export, has fallen by more than half over the past two years, causing investment to fall and forcing the government to rein in spending to hit its fiscal targets.

Short URL : http://goo.gl/RkKP8F
  1. http://goo.gl/HdjRsG
  • http://goo.gl/tMxvWX
  • http://goo.gl/Ogz7zM
  • http://goo.gl/sSGpH1
  • http://goo.gl/mQeeBw

You can also read ...

The S&P Mumbai Stock Index Sensex shed 73.88 points or 0.21% and closed at 35,548.26 while the Nifty50 index dropped by  17.85 points or 0.17% and settled at 10,799.85.
It is expected that the latest installment of concerns over...
Markets in Argentina, Brazil and Turkey took  the biggest hits from the fed rate hike.
Higher US rates are rattling many emerging markets in much the...
New Zealand Economy Facing Headwinds
New Zealand’s economic growth is expected to have slowed...
JPMorgan argues the record levels of debt in the US are a clear late-cycle indicator—and sees tough times ahead, at least in credit markets.
It seems like every time Joseph Harvey opens the Wall Street...
Copper Slips to 2-Week Low
Copper eased for a third session on Monday on fears trade...
Without users, it would simply be a worthless token.
Cryptocurrencies are not scalable and are more likely to...
Egyptian Lawmakers Decry Sisi Gov’t Economic Reforms
A group of Egyptian lawmakers on Sunday criticized recent...
Turkey Jobless Rate Falls to 10.1%
Turkey’s unemployment rate stood at 10.1% in March, falling 1....

Trending

Googleplus