In April, Colombian economic activity fell for the first time in 26 months. Indeed, the Economic Monitoring Indicator (ISE) was in negative territory (0.8 percent annually) in the fourth month of the year, according to what was presented yesterday Tuesday by the National Administrative Department of Statistics (Dane). The last time this indicator had been in negative territory was in February 2021, when it stood at 3.1 percent.
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Compared to March of this year, the ISE showed a 1 percent drop, reported the country’s statistical agency.
In the annual data, where the worst performance was presented was in the secondary activities, with a strong annual drop of 6.8 percent. These activities include manufacturing industries and construction. Compared to March, secondary activities registered a reduction of 0.5 percent.
Meanwhile, the second worst performance in annual terms was that of the primary activities, which include agriculture, livestock, hunting, forestry, fishing and the exploitation of mines and quarries. In this group, there was a 2.9 percent reduction in activity.
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However, these activities have the worst monthly performance, with a fall of 2.5 percent in April compared to March.
For their part, tertiary activities, where services are located, grew 0.8 percent in annual terms, and fell 0.1 percent in monthly terms.
Among these, financial and insurance activities stand out, which grew 5 percent annually, although they fell 3.2 percent in the last month.
Wholesale and Retail; repair of motor vehicles and motorcycles, among other related activities, presented a negative dynamic of 1.73 percent for that fourth month of the year and a much more drastic drop compared to the previous month, close to 5.61 percent.
reasons for the fall
According to an analysis by the economic research team of Banco de Bogotá, the situation in the commerce sector is discouraging, not only because of the drop in its sales, but also because the outlook for the future is not very clear.
The entity’s experts explain that consumer confidence has been framed by a notable downward trend and achieved in May almost a year with negative performance, which confirms that the euphoria after the elections was short-lived.
In turn, business confidence and sales prospects are moving away from all-time highs, and their performances are close to all-time lows.
With the absence of the measures that stimulated consumption in the pandemic and with a cycle of rising rates, the demand for durables suffered and, therefore, today it is the category that detracts the most from the dynamism of trade, where the economy will not help either. weaker and weaker vehicle sales that this year could only be 180,000 units, far from last year’s 250,000, warn the bank.
And although there was some progress in the information and communications sector in April (1.31 percent), compared to the immediately previous month the contraction was quite marked, close to 7.5 percent, according to what was reported by the national statistical entity.
That last month was also revealing for real estate activities and even for those that understand public administration.
Although in real estate a dynamic of 1.8 percent was obtained, between March and April that dynamic was only 0.5 percent, which shows the slowdown.
In the latter, for its part, the annual growth was 1.64 percent, while that compared to March of this year reached 4.1 percent.
For some unions of the economy It is very likely that these first signs of a slowdown will continue for the remainder of the year.
“As expected, the Colombian economy would present slower growth due to impressions of the national context, but also internationally. If timely measures are not taken, the trend will continue to decline”, commented María Claudia Lacouture.
He added that the results confirm the effects of the tightening of monetary policy, which increase the cost of credit for companies and households and the increase in demand, while uncertainty remains due to the national and international situation.
“It is urgent that all the reforms that go through the National Government promote a positive change for productivity, labor flexibility and job creation. The companies hope to maintain their viability and continue contributing to the development of the country. Public-private actions should focus on offering a more favorable environment for economic dynamics and industrial growth”, pointed out the AmCham president.
ECONOMY
