The recovery achieved by the Colombian economy in 2021 caused the market to raise its forecasts on several occasions last year, as the different sectors, investment and consumption, returned increasingly favorable results.
This Tuesday, the National Administrative Department of Statistics (Dane) will release the official GDP data for 2021, but the market’s bets are already on the table, and they generally point to a double digit, very close to 10%.
(See: Current challenges in terms of economic and social policies).
The Treasury The national economy is officially expected to grow 9.7%, while the Bank of the Republic revised its estimate upwards in its latest ‘Monetary Policy Report’, published at the end of January, from 9.8% to 9.9%.
Reaching double-digit growth in the year of recovery is an expectation that several market players have joined. Carolina Monzón, manager of Economic Analysis at Itaú, assured that “a scenario of strength in household and government consumption would imply a 10% growth in 2021”. This in the midst not only of the reopening, but also, according to Monsón, of the positive effect generated by a low base of comparison with respect to 2020 when the GDP registered a fall of 6.8%.
Likewise, Mauricio Hernández, an economist at BBVA Research for Colombia, highlighted how GDP would reach 10%, since “in 2021, GDP growth ended with outstanding dynamics, explained especially by final consumption, both by households and by consumers. government. With this performance, the total GDP managed to exceed its pre-pandemic values at the end of the year, especially driven by the rebound in private consumption.”
(See: Rates could reach 8%, according to Bank of America estimates).
Hernández assured that, however, other components of GDP, such as investment and exports, must still recover part of the ground lost during the pandemic. From BBVA, on the other hand, a result of 9.1% is expected for the GDP for the last quarter of the year.
On the other hand, Juan Pablo Espinosa, Director of Economic, Sectoral and Market Research of Bancolombia, assured that from the bank an aggregate growth of 10% is also expected. According to the economist, in the last part of the year, the fourth quarter, there was a significant influence of the events of the day without VAT and Black Friday for consumer decision-making.
“On the sectoral side, what has already been explained would have favored trade. For its part, in the last month of last year, the industry was favored by a higher volume of orders and the reduction in the cost of international freight for the import of raw materials. Finally, another sector on the way to recovery was mining, especially coal extraction, in line with the latest foreign sales reports.“, He said.
Other entities like Bank of Bogota and Credicorp Capital they are also located in a forecast of 10%, but other market agents have an even more optimistic outlook. So much so that the International Monetary Fund (IMF) revised its estimate about a week ago, which was at 7.6%, and placed it at 10.2%.
The results of the last quarter of the year have affected this perception. “We have a forecast of 8.9% for the last quarter, which would give us a 2021 GDP between 10.1% and 10.2%. I think that consumption helped a lot, partly driven by the days without VAT, which helped motivate purchases, but the great ‘driver’ in aggregate demand was the savings made by being locked up and the return to face-to-face for many business”, assured Wilson Tovar, manager of economic research at Acciones y Valores.
Likewise, from Scotiabank Colpatria, Its main economist, Sergio Olarte, mentioned that there is a forecast of 9% in annual terms, which would leave the entire economy growing by 10.2% in 2021. “We see that in the last quarter the commerce, transport and hotel sectors continue to show very favorable dynamics. Additionally, from agribusiness, we see sectors that took advantage of the depreciation of the peso to increase exports, such as flowers and meat“, He said.
(See: Reasons why rates would not be raised in the country this month).
MODERATE FORECAST
Other forecasts have been somewhat more timid and are not located in the two digits. That is how Bolivar Group – Daviviendao Corficolombiana they expect the economy to record 9.8% growth in 2021.
The economic studies center Anif recently updated its projections, to a range between 9.7% and 10.1%, but other entities such as XP Investments went for a projection of 9.7% while BTG Pactual He opted for 9.6% for the GDP data for 2021.
Positions regarding the growth of the Colombian economy vary.
On the other hand, international organizations such as the Economic Commission for Latin America and the Caribbean (ECLAC) updated their forecasts at the beginning of the year, and for Colombia the improvement in the projection raised the data from 7.5% to 9.5%, while the Organization for Economic Co-operation and Development (OECD), reiterated in recent days that they consider that the 2021 figure could be 9.5% “although highly influenced by the statistical drag effects of 2020.”
Another conservative position is that of Fedesarrollo, “we are since September at 9.5%. It is probably higher, but we wanted to move from that forecast”, said its director, Luis Fernando Mejía, while from Citi, Esteban Tamayo, Citi’s chief economist for Colombia, Peru, Central America and the Caribbean, also indicated that the forecast remains at 9.5%, but with an upward risk. .
“2021 was a year in which growth came thanks to a return to personal mobility, leading to a more noticeable reactivation of commerce, transportation, hotels and tourism, and recreation activities. Manufacturing also had a significant recovery. By demand components, household consumption was strong”, he highlighted.
UNIONS HIGHLIGHT DYNAMICS OF THE ECONOMY
Just as the banks, commission agents and international organizations launched their bets, so did the guilds.
From Asobancaria the figure they expect is 10.3%, and its president, Hernando José Gómez, mentioned how “during the year, all sectors had a reactivation, with the exception of the mining sector.”
(See: Four of 10 MSMEs had falls in production at the end of 2021).
Likewise, from Andi, the estimate is at 10%, and the good economic performance is related to the massive vaccination strategy, the greater consumption of households, the implementation of policies regarding public health and reactivation and adaptation of the business sector.
LAURA LUCIA BECERRA ELEJALDE
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