GDP for the third quarter was slightly below expectations

The Dane presented this Monday -November 18- the consolidated economic growth data for Colombia in the third quarter of 2024, in which it can be seen that the country maintains a positive trend, although in this opportunity fell below what experts expected and the industry remains in the red.

For the period July – September, the annual variation of the Gross Domestic Product was 2%, a figure that far exceeds the -0.6% that was seen in the period of 2023, but it contracts slightly compared to the 2.1% that was obtained in the immediately previous quarter, in which it can be initially interpreted as a stagnation of the economy.

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Taking into account that the economic projections compiled and shown by Dane expected this indicator to be between 2.1% and 2.5%; The report clearly shows that the economic pace is a little below what was thought and that little by little the good pace that was achieved during the end of the second semester is slowing down.

Meanwhile, in the series adjusted for seasonal and calendar effects, GDP reached a variation of 0.2%; the lowest so far this year, although slightly above the 0.1% seen in the third and fourth quarters of 2023. In the case of variations For the first and second quarters of 2024, Dane adjusted them to 0.7% and 2.1% respectively.

Sectoral divergence

Data like this (2%), not counting the second quarter of 2024, has not been seen for two years; just before the country entered a period of marked slowdown that even took the economy into negative territory at the end of last year. However, analysts must pay close attention to the uneven growth in the sectors.

Although 10 of the 12 economic activities measured by Dane were with positive results, it is striking that while artistic activities (14.1%) and agriculture, livestock, hunting and fishing (10.7%) appear in the first two boxes with the strongest rebounds, third place goes to financial activities (4.4%). These three lines of the economy explain more than 85% of the growth achieved.

The list of favorable data also includes construction (4.1%), public administration (2.1%), real estate activities (2%), commerce and transportation and public services (1%), information and communications (0.8 %) and professional and scientific activities (0.5%). For analysts, this should be reviewed carefully, since it shows that the country’s economy is not advancing correctly.

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“Colombia’s GDP figures slightly below expectations. The economy as a whole grew 2% annually during the third quarter of 2024. Divergence continues at the sector level. Hydrocarbons and industry in negative territory. Agro and activities “artistic arts are growing by double digits,” the president of Anif, José Ignacio López, initially said.

Now, as far as the sectoral review is concerned, the collapses were for manufacturing industries, which fell 1.3%, in line with what the market expected, while mines and energy, which fell 7.1% and surprised, given that although it was expected that its dynamics would not be the best, the data provided was the lowest in the economy.

Uneven balance

Reviewing the behavior of GDP for the third quarterthe data are of lights and shadows, and although the economy is shaping up to meet what was projected by the National Government, while investment recovers, the muscle of the State seems to be weakening after keeping the ship afloat for more than six months.

Agro

Courtesy

In this sense, the National Administrative Department of Statistics reported that gross capital formation grew by 22.7% compared to the same period in 2023 and gross fixed capital formation, which directly marks private investment, achieved a variation of 4%. , which leaves behind the -11% of a year before and the -6.5% with which 2024 started. Compared to the April – June period, it remains close to the 4.3% achieved.

It should be noted that although investment remains in the green after returning to positive territory in the third quarter, according to experts, current levels are still insufficient to ensure effective growth of the economy and should aim to reach a range greater than 20%.

On the other hand, in the case of exports there was a growth of 3.8% and for imports of 11%. In this way, Colombia accumulates a GDP of $1,240 billion in the nine months that were measured for this report, after reaching $432 billion for the third quarter, according to Dane.

“Frankly, I came to believe that the third quarter was going to have a better performance.” of GDP growth, much more taking into account the base effect of the similar quarter of 2023 (which was -0.6%). Grow at 2% depending on the public administration component but above all with a very low growth compared to the previous quarter (0.2%). It is not the best result,” said the rector of the EIA University, José Manuel Restrepo.

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Finally, it must be said that, as expected after the budget cuts made by the Ministry of Finance in the middle of the year to alleviate the cash problems that the Nation had, the State’s contribution to the economy is declining, since General government final consumption spending fell -4.3%, a situation that contrasts with household spending, which rose 1.6% on this occasion.

Given this, Bruce Mac Master, president of Andi, said that it stands out the behavior of the coffee sector with a growth not only in volumes but also in the price per kilo that undoubtedly affects a very important part of the Colombian agricultural population and the Colombian countryside.

Mining

iStock

“However, there are some figures that do concern us, such as the case of the mining and hydrocarbons sector, which decreased by 7.1%, and the industry sector, which continues its growth path, in this case falling by 1 .3%. It is very important that the National Government urgently advances some of the measures that have been proposed in terms of support for the Colombian industry,” he said.

For now, the accounts of the economy in Colombia continue to leave the industry as the most affected if it is taken into account that most of the year has been in the red, despite being a sector that contributes to the generation of employment and the dynamics of growth. Likewise, you should not trust the good step, since much of it has been achieved by factors that can be easily reversed.