Colombia’s GDP grew by 17.6% in second quarter over first quarter

RIO DE JANEIRO, BRAZIL – On Tuesday, August 17, the director of the National Statistics Institute (DANE), Juan Daniel Oviedo, announced at a press conference that Colombia’s GDP grew by 17.6% in the second quarter.

This result is close to the expectations of analysts, who had predicted growth of 18% for the period, which is very favorable considering that in this period the country faced the third peak of contagion, in addition to the difficulties and losses faced by some sectors due to the blockades in the national strike.

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In the second quarter of 2021, based on the monthly results for April, May, and June, all sectors of the economy registered growth, especially the entertainment and artistic activities sector, with an increase of 83.8%.

According to the figures provided by the ministry, wholesale and retail trade, maintenance and repair of motor vehicles, transportation and warehousing, and accommodation and food services made the largest contribution with a 40.3% increase, adding 6.1 percentage points to the annual change.

“The GDP in the second quarter of 2021 reflects that 11.5 percentage points of growth are attributable to trade, transportation, accommodation, and food services,” commented Juan Daniel Oviedo, director of Dane, adding that manufacturing also grew by 32.5% and contributed 3.5 percentage points to the annual change.

Other important gains were in agriculture at 3.8%, mining at 7.1%, public services at 9.1%, information and communications at 10%, finance at 3.3%, and real estate at 2.1%.

Although quarter-on-quarter growth was positive, it should be noted that GDP contracted by 2.4 percent between April and May, compared to January and March, due to food and fuel shortages. However, in June, the Colombian economy grew by 14.5%.

“This is the best annual change in the growth of the economic surveillance indicator since the pandemic,” Oviedo commented, referring to June.

Earlier this year, the government set a 6% growth target for Latin America’s fourth-largest economy. Still, last month the Central Bank’s technical team announced that the forecast had been raised to 7.5%.

Meanwhile, some economic organizations have shared their expectations for the end of 2021, such as the Association of Banks and Financial Institutions of Colombia (Asobancaria), which mentioned that the Colombian economy is expected to grow by 7.3% this year, which would lead to the country to reach the same production level as in 2019.

According to the president of the Asobancaria, Hernando José Gómez, this announcement is significant, since, at the beginning of the year, the association had assumed not only that the economy would grow by 6.1%, but also that the recovery of the sector would take at least three more years.

Gómez added that all sectors of the economy in Colombia would continue to grow during the rest of the year so that the country’s gross domestic product (GDP) will reach 7.3%.