Entertainment went from being one of the sectors hardest hit by the paralysis caused by the pandemic to three years later becoming an axis of the economy. People have not stopped going to concerts, plays, festivals and parties such as the Carnival of Barranquilla since then, while the online gambling business has grown more and more. All this is reflected in the increase of 18.7 percent that this branch had in the first quarter of the year.
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In total, according to the Dane, the economy grew 3 percent in the first three months of 2023, down from 8 percent registered in the same period of the previous year. However, these cultural events plus the branch of financial and insurance activities, which grew by 22.80 percent, prevented the slowdown from being greater. The latter mainly highlights the growth of general insurance, such as auto and engineering.
The 3 percent data was somewhat below the expectations of most market analysts. For example, the Banco de la República hit the mark, since it expected 3 percent; but Bancolombia projected 3.4 percent, and Banco de Bogotá, 3.5 percent.
“Overall, this figure is positive news. However, it already shows a slowdown in the economy compared to what was observed in 2022 and confirms the projections that were made in this regard by the main economic analysts”, said Bruce Mac Master, president of Andi.
It must be remembered that factors such as high inflation and the interest rates of the Banco de la República have led both international and national organizations to reduce their growth prospects for this 2023. For example, the International Monetary Fund projects an increase 1 percent and the World Bank another 1.1 percent.
According to the statistical entity, so far this year the economy has grown by 2.9 percent: in January the figure was 4.8 percent; in February, 2.6 percent; and in March it slowed down to 1.6 percent.
“If we compare the first quarter of this year with the same period last year, we see that the economy is definitely slowing down. However, when reviewing the data we see that it is gradual,” said Sergio Olarte, principal economist at Scotiabank Colpatria.
more dynamic branches
In terms of growth, one of the 12 branches analyzed by Dane registered a positive year-on-year increase in the third quarter of 2023, except for the construction, which fell 3.1 percent.
According to Piedad Urdinola, director of the statistical entity, this fall is explained by the decrease of 14.9 percent that was obtained in the construction of civil works. Meanwhile, the construction of residential and non-residential buildings grew 2.6 percent in this period.
Behind financial activities (22.8 percent) and artistic activities (18.7 percent), the best performance, but by far, was increased by mining and quarrying, with growth of 3.6 percent. hundred.
It was followed by the category of Information and communications, with 3.20 percent; and professional, scientific and technical activities, with 2.30 percent.
Later it also appears with a growth of 1.9 therefore the branch of the Public administration and defense, education and health as well as real estate activities.
In particular, Urdinola stressed that they have seen a greater demand for health services. “We find greater demand for health services both in the public hospital network and in private IPS,” she said.
The ones that grow less
One of the items with the lowest growth in the first quarter of 2023 was agriculture, which only expanded by 0.3 percent. However, the Dane director highlighted this figure as positive since the field had been falling.
«It is a timid growth, but already positive, which is largely explained by fishing due to the greater demand for Easter and by the permanent cultivation of coffee,» said Urdinola.
Likewise, according to Mauricio Hernández-Monsalve, BBVA Research economist for Colombia, he highlighted that the agriculture and mining sectors grew again in year-on-year terms, after two consecutive negative periods and a negative result for the total of 2022 in the case of agriculture and a falling quarter in the case of mines.
One of the sectors that slowed down in the first quarter of 2023 was commerce, transport and accommodation, which only increased 0.5 percent as a whole.
While the subgroup of transportation and lodging increased by 3.1 and 1.7 percent, respectively, that of wholesale and retail trade and the repair of motor vehicles and motorcycles decreased by 1.2 percent.
“The trade cluster only grew 0.5 percent, very different from the 14.7 percent in the first quarter of 2022. This causes concern because this sector marked the economy during the reactivation. A verse begins and the impact of taxes, inflation, the dollar and the uncertainty due to government reforms, especially labor”, said Jaime Alberto Cabal, president of the Fenalco merchants union.
Besides, the manufacturing industry it only grew 0.7 percent in the first three months of the year, compared to the 10.4 percent registered in the same period of the previous year. Within this item, what fell the most was the manufacture of textile products (-7.1 percent) and the transformation of wood (-5.1 percent).
The supply of electricity, gas, steam and air conditioning also slowed down. This grew 1.40 percent, in contrast to 5.2 percent in the same period in 2022. Water distribution fell 1.3 percent.
Household consumption slows and investment falls
As reported yesterday by Dane, domestic demand fell 0.1 percent year-on-year in the first quarter of 2023. This deterioration was led mainly by the 10.3 percent drop in gross capital formationl, in contrast to the 21 percent increase in the same period of the previous year.
“This indicator includes a very good part of the investment in the manufacturing sector. Special attention must be paid to this dynamic that represents the potential to generate new formal jobs in the economy”, said Bruce Mac Master, president of Andi.
For its part, household spending increased by 2.9 percent compared to the figure of 10.6 percent for the same period of the previous year. What increased the most were services (6.4 percent) and non-durable goods (1.5 percent). On the contrary, people are no longer buying semi-durable (-2 percent) or durable (-8.2 percent) goods.
The main economist Scotiabank Colpatria explains that household consumption was driven by non-durable goods, such as food and the market in general. In addition to this, he said that the families opted for services such as going to school and taking transportation.
However, he pointed out that durable goods in the economy, such as televisions and automobiles, among others, slowed down and even fell during the first quarter of this year.
On the other hand, general government final consumption spending fell 0.2 percent in the first quarter of 2023 compared to 6 percent in the same period of the previous year.