Colombia exits recession as GDP grows 1.1% in Q1

RIO DE JANEIRO, BRAZIL – Although the market expected the Colombian economy to remain at negative numbers, the National Administrative Department of Statistics (DANE) reported that the country’s Gross Domestic Product (GDP) posted 1.1% annual growth in the first quarter this year, reaching $208.7 billion pesos (US$56.627 million) in constant prices, $2.2 billion pesos (US$596 million) more than in the same period last year ($206.4 billion pesos, equivalent to US$56 million).

With these figures, the Colombian economy recorded a positive quarter for the first time since the start of the pandemic, thereby exiting recession. “That means that the recession is over and the path to the recovery of our economy has begun,” said President Iván Duque.

According to some analysts, this signals that the economy is now in a period of recovery. “It suggests that the period of economic recovery has begun and provides some insight into a positive economic growth for the year 2021, which is essential for the recovery of employment,” said Luis Fernando Mejía, director of Fedesarrollo policy research center.

The sectors that most contributed to this growth were manufacturing industries, which grew 7% in the period, as well as public administration, defense, health and education (3.5%), and agriculture (3.3%). Together, these three activities contributed 1.6 percentage points to the total.

According to Carolina Monzón, chief economist for Colombia at Itaú bank, this positive result could be explained by lower restrictive measures, as well as the adjustment of sectors to maintain their operations despite measures such as curfews or targeted quarantines.