Colombia’s Economy Contracted 9% in Third Quarter, More Than Predicted

RIO DE JANEIRO, BRAZIL – Colombia’s economy shrank 9% in the third quarter compared with the same period last year, the government said on Tuesday, November 17th, as it continues to feel the effects of the coronavirus pandemic and a long lockdown.

The contraction was more severe than the median prediction by analysts, who said the Andean country’s gross domestic product (GDP) would contract by 8.7%.

The contraction was less than recorded in the second quarter, the country’s worst economic hit in at least decades, thanks to the lifting of more than five months of coronavirus quarantine which shuttered businesses and set unemployment soaring.

Government statistics agency DANE revised the contraction for the second quarter to a slightly more severe 15.8%, from a previous contraction figure of 15.7% and lowered growth in the first quarter to 1.2% from an original expansion figure of 1.4%.

The economy contracted 9.54% and 10.37% in July and August respectively and shrunk by 7.25% in September.

The recreation and entertainment sector contracted by 29.7% in the third quarter compared with the same period in 2019, while construction shrank by 26.2% and the retail, wholesale, transport, hospitality and food services sector contracted 20.1%.

Meanwhile, the real estate sector expanded 1.8%, while the agriculture and finance sectors grew by 1.5% each.

Compared with the second quarter, the economy grew by 8.7% in the third quarter.

Colombia’s central bank expects Latin America’s fourth-largest economy to contract between 6.5% and 9% this year, while the government expects a contraction of 6.8%.

Both entities expect a strong rebound in 2021, with the central bank predicting growth of between 3% and 7% and the government estimating more optimistic expansion of 6.6%.

Source: Reuters