The country stopped receiving more than $3 billion of investment in the first quarter of 2024

This week the data on the Gross Domestic Product for Colombia in the first quarter of the year were finally released, which confirmed a reality that has been mentioned on several occasions and that is that the deceleration It is not letting up and as time goes by, its consequences become more and more evident.

This has led to even the unions They had proposed a recovery plan for more than six months, which has not been heard, or that analysts insist on mentioning a term that seems simple, but that covers the genesis of a large part of the economic problems that the country is experiencing. : investment.

Beyond the 0.7% that the GDP reached in this report or that the national economy has been growing in slow motion for a year below 1%; Those who know about economics have focused on this opportunity to point out that increasing investment must be the Government’s priority at this time and to do so, the necessary conditions must be generated, starting with sending messages of calm to the market.

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For the rector of the EIA University and former Minister of Finance, José Manuel Restrepo, what was revealed by the Dane is a warning sign to understand that the mistakes that have been made in recent months must be recognized and a way to recompose the path. , considering that things are not going well.

Behavior of GDP in investment by sectors – 1Q 2024

Courtesy – Dane

“The slowdown in growth is worrying. Very affected sectors such as industry, commerce and various services. Growing at 0.7% is very poor and this is aggravated by the impact on tax collection and therefore on public investment. The reactivation does not take long,” said Restrepo Abondano.

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This economist recalled that “Colombia completed After the pandemic, not one but two years of record growth, also being the third and first highest country on the OECD list. “We were the second best economy in the world to recover from the economic impact that the Covid era brought with it, according to The Economist” and he regretted that this good step had been lost.

Behavior of GDP in investment by sectors – 1Q 2024

Courtesy – Dane

In order to know a little better about this alert that experts are talking so much about, Portafolio took a look at the Gross Capital Formation data, which is essential to determine the behavior of investment (public and private) in the country , to know what the outlook for the first quarter is and its evolution over time.

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Thus, the first thing to say is that this indicator in general terms fell 13.4% compared to the same period in 2023. This, put another way, means that the country received almost $6 billion less for this concept, when passing from $41.1 billion in the first quarter of 2023 to $35.1 billion in the January – March period of this year.

Industry

Juan Pablo Valderrama / Portfolio

On the other hand, regarding only the Gross Fixed Capital Formation, that is, private investment, the Dane data show that it is lower by $2.3 billion pesos, since last year it was $45.2 billion. and in this report it stood at $42.8 billion. All of this is better understood when we keep in mind that these are resources that stopped entering the economy.

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Another look at this topic can be that of the Anif Center for Economic Studiesthat an analysis of the GDP data indicated that although the first quarter had a good omen, after the ISE data for the year to February (with a variation of 2.2%), the good performance was overshadowed by the contraction in March (-1.5%), which counteracted the positive dynamics of the quarter by 0.5pp.

Behavior of GDP in investment by sectors – 1Q 2024

Courtesy – Dane

“This was explained by lower manufacturing production, a decrease in commercial sales and poor performance of the agricultural sector. We see that the economic dynamics remain weak, due to the poor performance of the main productive and job-generating sectors such as industry, construction and commerce, in accordance with the lower demand by households and the low levels of investment,” they indicated. .

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Reviewing the behavior of investment by sector, analysts have emphasized that the hardest hit was industry, a fact that is not minor, since when looking at the Gross Capital Formation for this concept it stands out that the variation was -10 .8%, which in pesos means that this sector stopped receiving $2.2 billion going from $21 trillion in 2023 to $18.7 trillion right now.

Behavior of GDP in investment by sectors – 1Q 2024

Courtesy – Dane

In second place, with the strongest falls, is the housing sector, which showed a decrease of 6.8% in the last year, after going from $9.6 billion last year to $8.9 billion this year; which translates into $656,000 million less during the last 12 months, in one of the pillars of the local economy.

It should be noted that this dynamic, described as “poor” By some experts, it is not only from 2024. When putting the magnifying glass on the behavior of these indicators from 2022 to date, it is seen that the fall increases the amount of resources lost to $19.5 trillion in all of 2023; Industry being once again the hardest hit point (-$16.9 billion).

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Finally, although the public sector has been a support to prevent the economy from falling into negative territory, there are more and more voices that highlight the need to create conditions for private investment to grow, since the muscle of the State is already It is not enough to generate the necessary reactivation.