The economic pace that the country has been showing in recent weeks is an issue that has been the subject of constant surveillance by analysts, authorities and economic study centers, who warn that if it is not implemented An urgent recovery plan is needed; the slowdown will continue and will affect other development drivers.
Although the rebound observed in April raised the optimism of experts and it was thought that the bad streak was beginning to end, May fueled fears after the Economic Monitoring Indicator once again slowed its growth and important sectors such as industry and commerce returned to negative territory.
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According to recent data from Dane, in the fifth month of the year the Colombian economy grew by 2.4% in its original series and 2.5% in the series adjusted for seasonal and calendar effects. However, in monthly terms, a contraction of -0.4% was observed. This average annual growth for January-May 2024 was 2.0%Excluding the atypical April performance, average growth in 2024 would be 1.1%.
Economic growth
Disparate sectors
With this in mind, the Anif Center for Economic Studies highlighted that secondary activities, which include manufacturing and construction, once again contracted by -2.9%, subtracting 0.4 percentage points from annual growth, in a negative performance that was driven by lower production in the manufacture of non-metallic minerals and the decrease in the construction of non-residential buildings.
Meanwhile, public administration and entertainment activities grew 9.0% (2.2 percentage points), mainly due to wage increases, bonus and retroactive payments, as well as gambling and betting activity during sporting events. In primary activities, agricultural production increased by 4.6%, driven by external demand for bananas and plantains, and increased slaughter of pigs and cattle.
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Those who are undoubtedly having a hard time for Anif are all members of the manufacturing industry, which was affected by the low production of non-metallic minerals and a contraction in spinning activities. Likewise, construction decreased due to the completion of important non-residential projects, which no longer contribute to the growth of the activity.
Colombian pesos
Sustainable development
In the final part, although Anif’s analysis does not specify direct proposals to overcome the economic slowdown, it puts on the table several strategies to boost the sectors in the red and ensure that The growth that is obtained in the future should not become a flash in the pan.
For experts, one could start by improving infrastructure and efficiency in construction, focusing on new infrastructure projects, especially in residential and commercial buildings, which could revitalize the sector. Along with this, one could work on resuming large construction projects and promote new investments.
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“If we analyze the results since the economic recovery In the post-pandemic period (October 2021) until May 2024, it is evident that the good performance in April was an isolated dynamic and May returned to the average performance of the economy for 20242. Industry and commerce again registered negative variations, after recording remarkable performances in April, where a large calendar effect was perceived,” said Anif.
Another area to work on is the agricultural sector, where growth in agricultural production can be leveraged through policies that encourage exports and the development of advanced agricultural technology and the improvement of infrastructure for climate management, such as advanced irrigation systems. The latter would help mitigate the negative effects of adverse climate phenomena, guaranteeing stable production.
Housing construction, one of the most affected sectors of the economy.
Finally, analysts point out that it is essential to promote the diversification of industrial production, starting by encouraging innovation and investment in new technologies, as well as encouraging the production of goods with greater added value. All this goes hand in hand with policies that support small and medium-sized enterprises. companies in the manufacturing industry, in order to generate sustained development.
