The annual variation of the Colombian economy was 0.7% for the period between January and March. And although the figure remained in line with analysts’ projections, it is a reflection that economic growth is advancing at a slow pace.
(Read more: How many jobs Bogotá needs to create to recover its economic dynamics)
However, GDP is not the only indicator of the decelerated behavior that is evident on the economic front, Consumption has also been impacted by this trend.
According to data from the National Administrative Department of Statistics (Dane), among the items in which a drop in consumption has been evident in the first quarter include clothing and footwear (-5.6%); transportation (-2.8%), communications (-2.7%), restaurants and hotels (2.4%), and education (-1.5%).
On the other hand, in the categories that have not been so affected are foods and non-alcoholic beverages, with 0.7%; recreation and culture, with 1.8%, and furniture, household items and for ordinary home maintenance, with 1.9%.
Other branches of high consumption by households are health, which reported a growth of 3.7% in the first three months of the year; accommodation, water, electricity, gas and other fuels, with a variation of 3%, and the purchase of alcoholic beverages and tobacco, with 2.7%.
(See: Former Minister of Finance says that Colombia needs a reactivation policy)
Consumption
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What is behind these results?
According to Camilo Herrera, president of Raddar, the slowdown in household spending may have its origins in the fact that “There are fewer people employed, there are fewer loans placed and in the case of remittances in homes the change is affecting.”
The decrease in household spending in recent months compared to the same period last year also shows that a drop in consumption per person, which has an effect on other areas of the economy.
“People specifically are buying much less things from one year to the next and, obviously, this not only affects the retail industry, but also the number of economic indicators and the quality of life of Colombian households.”Herrera said.
Along these same lines, the expert mentions that, although in the long term there is an improvement, in the short term not so much. In that sense, he highlights that the way forward is the reactivation of spending and sales so that the effect is also seen in production.
(See: Cash problems? They warn that the Petro government would be spending more than it has)
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