The economic forecasts for the second semester show a more timid dynamic, and the data from the Economic Monitoring Indicator (ISE) for July already shows the first signs of a slowdown.
(Economic activity grew in Colombia 6.4% during July).
The National Administrative Department of Statistics (Dane) presented the report for the seventh month of the year, according to which economic activity grew 6.41% in July compared to the same month of 2021.
According to the deputy director general of the entity, Julieth Solano, although the variation of the ISE is still in positive territory, it was 2.2 percentage points below that presented in June 2022, when it grew 8.6% in its annual dynamics.
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“Both in the original series and in the adjusted series we are seeing positive variations but with less intensity so far this year”said the official. In its inter-monthly variation, on the other hand, the indicator showed a negative variation of -0.3%. This, according to Solano, showed “a slight change in trend with the variation we had for the ISE of June 2022, when it stood at 0.2%”.
In relation to the sectors, the main boost in economic activity in July was explained by the branch of services, or tertiary activities.
This group has a weight of 69.8% within the economy, and registered an annual variation of 7.6%. This was 2.9 pps lower than the variation of June 2022 (10.5%) and 8.5 pps lower than that of the same month of 2021 (16.1%). In the case of the monthly variation, this was negative: -0.2%.
Within this group, the branch of commerce, transportation, accommodation and food services presented a contribution of 1.9 pps, being the most important for the entire economy. In the case of public administration, defense, education and health, the contribution to the variation was 0.99 pps. And they were followed by artistic and recreational activities, with 0.8 pps.
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Secondary activities, including manufacturing and construction, showed annual growth of 7.6%, but fell -0.7% compared to June. These contributed 1.1 (pps) to the total variation of the indicator.
Finally, there were the primary activities, mines and quarries and agriculture, those that pushed the economy down in July, since they showed a negative annual result of -1.7%, which is why they contributed a negative 0.2 pps to the total variation.
According to Solano, it was the mining and quarrying sector in particular that explained part of this fall, since negative dynamics in production persist in this sector.
A slowdown already announced
According to experts, the figures left by the indicator already show signs of that slowdown that is expected for the second half of the year.
According to Sergio Olarte, chief economist at Scotiabank Colpatria, the figure of 6.4% from the ISE “reflects a small slowdown, mainly motivated by the primary sectors of the economy, especially by the inconvenience in obtaining supplies.”
Olarte mentioned how it can be seen that the increase in interest rates and higher than expected inflation for the month of July are somehow motivating the gradual slowdown in the economy. He also said that in the future the economy is expected to continue to slow down gradually.
On the other hand, Gustavo Acero, senior economist at Banco de Bogotá, indicated that the growth towards the second part of the year “It is going to slow down, we will not see two-digit variations as we have been seeing in the first half of the year or last year.”
(Economic activity in Colombia changed 8.5% in June).
The expert mentioned that the figures for the first half of 2022 had a base effect component and that is why there is now a slowdown. “We are seeing that with the monthly change in the ISE series; which is beginning to stabilize, as with other indicators such as industry and commerce”said.
According to Acero, although the economy is beginning to slow down in its growth rate, the figure for the month of July continues to be “very good”, and reflects a positive behavior in various sectors.
LAURA LUCIA BECERRA ELEJALDE
