Investment and consumption already show signs of economic slowdown

The Colombian economy grew 3.0% in the first quarter of the year, a rate well below the dynamics seen during 2021 and 2022. And this was largely explained by a slowdown in both consumption and investment .

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As the Dane announced this week, during the first quarter of the year the final internal demand presented a slight fallwith a rate of -0.1%, while a year ago its variation in annual terms had been 12.6%.

“There is significant final consumption spending, which is basically marked out by household consumption spending. In other words, there was an increase in the consumption of Colombian households”highlighted the director of Dane, Piedad Urdinola.

According to the entity’s figures, in the first quarter of the year, final consumption presented a growth of 2.6% in comparison with 2022household consumption grew 2.9% and that of the government registered a negative figure of -0.2%.

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These figures, although they were positive at a general level and in the case of households, show a slowdown compared to a year ago, since in the first quarter of By 2022, final consumption had grown 10.6%, that of households 11.2% and that of the Government 6.0%.
On the other hand, in gross capital formation, or investment, it registered a reduction of 10.3%, and in the case of gross fixed capital formation (investment in machinery), the contraction was -1.0%. .

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According to Mauricio Hernández Monsalve, BBVA Research economist for Colombia, the 0.1% deterioration in domestic demand was led by fixed investment and de-accumulation of inventories.

“Private consumption, for its part, had a heterogeneous behavior: positive in services and non-durable goods, and negative in durable and semi-durable goods. explained the economist.

Sergio Olarte, Scotiabank Colpatria’s chief economist, agrees with this, who highlighted that household consumption during the first quarter of the year was boosted by the consumption of non-durable goods.

“This is the food and the market; in addition to services because we still have to go to school, take transportation and that kind of thing, but durable goods in the economy (televisions, cars, among others), these slowed down, they even fell during the first quarter of this year anus“, said.

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From Bancolombia’s Economic, Sectoral and Market Research Department, it is highlighted that the result of GDP, in general terms, is interpreted as positive. “However, the evolution of demand items shows some signs of the impact of high interest rates”, the report stated.

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Regarding total consumption, Bancolombia highlights that thisjoró, mainly explained by a notable recovery in public spending.

On the investment side, on the contrary, it is mentioned that the balance was negative, “given the pronounced decline in machinery and equipment”.

Regarding the external sector, Grupo Bancolombia highlights that it contributed positively to the result.

LAURA LUCIA BECERRA ELEJALDE
Journalist Portfolio