Today the consolidated data will be known GDP growth corresponding to the second quarter of the year, which will be essential to know what to expect from the country’s economic performance throughout the year, in a context of slowdown that has not yet passed and the urgency of a economic recovery planwhich was already announced by the National Governmentbut which still seems to be far from being implemented.
Although things are not going well for many and some sectors are focusing their attention on warning points such as the fall in investment, things would not go completely wrong in this cut of accounts, according to projections from Corficolombianawhich indicate that agriculture, the state sector and public services will have a greater impact on the recovery than was expected a few months ago.
César Pabón, Director of Economic Research at Corficolombianaspoke with Portafolio about what he expects for the Gross Domestic Product in the period April – June and stated that at this point he prefers to see the “glass half full”, given that the results in the fourth and fifth months of the year showed a very positive dynamic.
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“Let us remember that there is a seasonal effect, since Easter last year was in the second quarter and this year it is in the first quarter, and this favors growth in this period. In particular, we saw a very high growth figure in April in its seasonally adjusted series, with a growth of 4%, which even in May continued to surprise us on the upside.“, he began by telling.
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Unexpected help
This being the case, for this expert, GDP growth of close to 2% is expected for the second quarter and he considers this to be a positive surprise, since the initial forecasts were below this level, even expecting a figure close to 1%, which apparently will be widely exceeded.
“Let us not forget that during this time we had some upward surprises, mainly from the public administration, which has been growing at a very important rate and has seen an upturn in the previous months of more than 9%, thus becoming, as President Gustavo Petro said, a milestone for the economy.“, said Cesar Pabon.
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In turn, the estimates of nine economic research centers, including the Corficolombiana team, report that in the second quarter the economy would have expanded by 2.3%.
There are even highly positive estimates, such as those of the economic research teams at Banco de Bogotá and BTG Pactual, which point to a growth of 3.3% between April and June.
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For analysts at Banco de Bogotá, the services sector largely explained the growth of the economy in this period, pointing out that public spending would cease to contribute significantly, due to the cut in official spending.
Additionally, Corficolombiana analysts project that the agricultural sector and public services will give a significant boost to GDP growth in the data that will be released by Dane, since from their perspective they have shown resilience and a favorable performance, with a notable increase in energy demand due to the El Niño phenomenonwhich has particularly benefited public services.
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“Let us remember that in the first half of the year there was El Niño and this type of phenomenon increases the pressure on public services, particularly energy, and of course, this makes these sectors grow a little above the economy. These have been the positive surprises.“, he added.
Expectations for 2024
Although there are good hopes for what is coming in the second quarter of the year, the Corfi team adds that this good performance of these sectors of the economy will not last forever and it is necessary to pay attention to the sectors that remain in the red, such as the trade, industry and constructionotherwise the deceleration cannot be stopped.
“Not everything is in play, but a large part is. Even if very early agendas or reactivation plans are made, that is important because when we talk to the investment sector, we realize that investment is something that is reactivated from one day to the next, but the other fronts, whether it is the infrastructure sector or the mining and energy sector, take time. So I think that, let’s say, it is difficult to foresee a major adjustment for 2024, and in that sense it is better to start thinking about 2025.“Pabón said.
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On the other hand, projections also point to a slight recovery in consumption in the second half of the year, driven by the reduction in interest rates, a situation that could benefit trade, entertainment activities and services, offsetting the slowdown in other sectors such as public administration and agriculture.
In this way, Corficolombiana experts point out that Annual growth closed at around 1.8%, This is a higher figure than expected a few months ago, but as already mentioned, it is still insufficient to overcome challenges such as poverty and unemployment. These experts also project a growth of 2.6% for 2025, which means that they maintain that there are challenges to overcome in the outlook.
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“Perhaps consumption may have a positive surprise, but I would say that in general the message is that this takes time. In other words, it is not something that responds to immediacy and that is why it requires messages that reassure that it is better to comply with this reactivation agenda and that this will effectively be reflected in the economy,” concluded César Pabón, from Corficolombiana.
Anif sees it close to 2%
He President of the economic studies center Anif, José Ignacio Lópeznoted that the entity expects the GDP increase for the April-June period to be close to 2%.
For its part, the Fedesarrollo research center, headed by Luis Fernando Mejía, estimates that the economy has grown by 2.1%.
However, in the financial opinion survey carried out by the entity, corresponding to July, the analysts surveyed had a slightly more conservative forecast, of 1.5% for this period and 1.7% for the third quarter.
Daniel Hernandez Orange
Portfolio Journalist
