The Colombian economy grew 10.6% in 2021. This figure was above not the market estimates, which were between 9.5% and 12.3%, but the official data for last year’s growth released yesterday by the National Administrative Department of Statistics (Dane ) exceeded government estimates, which forecast 10.2%.
(Read: ‘2021, the year of reactivation’: reactions to GDP).
The Dane also revised downwards the results of the economy for 2019 and 2020, which respectively went from a figure of 3.3% to 3.2%and from -6.8% to -7% in the year of the pandemic.
As Dane highlighted, a good part of this dynamic was explained by the results in the last part of the year, where sectors such as commerce, transportation, accommodation and food services; manufacturing industries, and the public sector, marked the economy.
“GDP growth was 10.6%, well above the range of expectations. That growth is significantly driven by fourth-quarter annual growth, which was 10.8%, and a quarter-on-quarter boost of 4.3% between the fourth and third quarters of 2021.”, highlighted the director of Dane, Juan Daniel Oviedo.
From the expense approach, the Dane showed how the final consumption expenditure it was one of the drivers of the economy, with an expansion of 14.1%, while in 2020 it presented a contraction of 4.2%. There, household consumption expenditure showed a growth of 14.6%, while that of the general government increased by 12.1%. And particularly, purchases of durable goods grew 22% in 2021, those of semi-durable goods by 40.7% and those of services 16.7%.
Likewise, the Dane revealed that in 2021 gross capital formation registered an annual variation of 9.9%, while exports increased by 14.2% and imports by 27.5%.
(What’s more: The economic activity in the country was 11.8% in December 2021).
On the other hand, in ordinary terms, 2021 GDP reached $1.177 trillion, which allowed an annual GDP per capita of $23.05 million, with a monthly equivalent of $1.92 million per inhabitant. In 2020, the total GDP was $998,719 million in current prices, while in 2019 it was $1,060 billion.
Mauricio Hernández, BBVA Research economist for Colombia, highlighted how economic growth stood at 10.6%, “not only due to good dynamics at the end of the year, but also due to upward corrections in the previous two quarters, due to better investment in buildings and final consumption”, To this, according to Hernández, was added the reduction in growth in 2020, and the latter determined a less demanding statistical base for the measurement of 2021.
The Dane showed how final consumption spending was one of the drivers of the economy, with an expansion of 14.1%
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For his part, Sergio Olarte, chief economist at Scotiabank Colpatria, mentioned how, “this is quite good data and confirms that pre-pandemic levels were reached during the second half of last year. The most dynamic sectors continued to be commerce and hotels, precisely because of the reactivation of the economy and greater mobility; manufacturing industry and education and public sector activities. This is quite positive, however, employment is still below pre-pandemic levels by approximately 4%, that is, we are producing more but unemployment is a little behind in its recovery.
Precisely, Oviedo explained that there is a gap between the measurement of recovery of the economy compared to the rate of reactivation of employment, this when comparing the rate of reactivation of the economy with a scenario prior to the pandemic. “If 2019 were a 100, we are now at a level of 102.8, but while the product evolution index stands at 102.8 in 2021, the employment index stands at 94.6%, the gap compared to to 2019 between the product and employment is 8.1 percentage points”, explained Oviedo.
(Keep reading: Dane revised down the economic growth of 2019 and 2020).
Luis Fernando Mejía, executive director of Fedesarrollo, pointed out that it is “excellent news that growth in 2021 (has exceeded expectations. But there is still a gap compared to the pre-pandemic trend level: the economy is 4% more small, produces $47 billion less”, said Mejía, who assured that the challenges are in closing this gap, generate more employment and reduce inflation.
For his part, the Minister of Finance, José Manuel Restrepo, stressed that “This recovery began with the relaxation of several of the restrictive and capacity measures, without neglecting health, since effective progress has been made in the vaccination plan, all this, added to the economic and social incentives that the National Government has granted, is reflected in the good behavior of the productive sector”.
The challenges are to close this gap, generate more employment and reduce inflation.
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COMPARISON VS 2019
The Dane clarified, however, that part of the 2021 GDP result is explained by the statistical effect generated by the 2020 drop of -7% in the economy, as a result of the shock of the covid-19 pandemic. Thus, growth in biennial terms, compared to 2019, was 2.8%. “This means that the value in constant terms of GDP in 2021 was 2.8% higher than that which was consolidated in the Colombian economy in the year prior to the pandemic, which was 2019.”, Oviedo clarified during the presentation of the GDP results.
Additionally, the Dane also delivered a biennial series, which compares the growth of two years, with the aim of isolating the effect created by the pandemic.
(Read: Colombia’s economic growth, year by year).
“This historical series establishes that the biennial impulse of the economy in the year 2021 had a growth of 2.8%, but this is the lowest value that we have observed in the positive biennial calculations since the 1990s. This was done in order to to contextualize that this 10.6% of the year 2021 has a statistical adjustment for the result of 2020”, clarified the director of the Dane.
The growth in constant terms, the GDP of 2021 was 2.8% higher than that which was consolidated in the Colombian economy in the pre-pandemic year, which was 2019
THE SECTORS
Dane also highlighted that, in terms of added value, in 2021 the Colombian economy grew 10.3%, and that three branches explained 7.1 percentage points of the annual growth of the Colombian economy: commerce, transportation, lodging and food services; manufacturing industries; and public sector, health and education. This calculation, unlike the GDP, discounts intermediate consumption, as well as taxes.
The most important growth is associated with artistic and entertainment activities, which, as Oviedo explained, are related to the practices of games of luck and chance, which in 2021 had an important dynamic and registered an annual increase in their gross added value of 33%. In the case of commerce and manufacturing industries, there was evidence of an increase in their annual value added of 21% and 16.4%.
“Trade activities explain a third of the value added of the economy in 2021, and with manufacturing activities, both are explaining 60% of the value added in the year 2021”, said Oviedo, who also highlighted how health activities, associated with the covid-19 emergency, as well as the reactivation of other services, contributed to a 6.9% growth for this item.
As for other sectors, agriculture registered a growth of 2.4%the exploitation of mines and quarries, which during 2020 had fallen by -15.6%, registered a positive variation of 0.4%, while public services grew 5.1%, compared to a performance of -2.6 % in 2020.
(Keep reading: Tax collection in January reached $23.19 billion).
The recovery of construction reached 5.7%, after the drop of -26.8% left by the year of the pandemic (2020), while the ICT sector grew 11.2%, financial activities grew 3.4% , real estate companies 2.6% and professional, scientific and technical companies 6.9%.
Some union representatives highlighted the dynamics of their sectors. Jaime Alberto Cabal, president of Fenalco, mentioned that the result is very positive for the country and that “andhousehold consumption It was a great protagonist, growing 14.1% in the year. By type of goods, the one with the highest growth was the semi-durable segment, 40.7%, highly influenced by the days without VAT, which were dates that gave the economy a boost during 2021.”
Likewise, from Andi, Bruce Mac Master pointed out how “the manufacturing industry, which registered a growth of 16.4% in 2021 compared to 2020, was the second line of the economy that contributed the most to the general result, specifically with two percentage points, which shows once again that we have a dynamic, powerful and very resilient industry”. And he added that it will be very important that during 2022 this trend can be ratified.
From Camacol they highlighted that “the country is making positive progress” towards its recovery.
The president of this guild, Sandra Forero, valued that in the results in the added value of the building sector they presented a notable increase of 11.6% in 2021, “which shows that the construction of housing promoted, not only the growth of the economy, but also the added value in sectors such as industry and the trade of inputs, with which it maintains a high level of productive linkages”.
The director of the Colombo-American Chamber of Commerce, AmCham Colombia, María Claudia Lacouture, said that “the result is good, above the international average, but it is still a conjunctural index, although it is very important that activity is maintained and let’s continue with full productivity”.
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