Colombian Economy Continues to Expand at a Healthy Pace
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Although recently submitted statistics have suggested that Colombia’s economy could be experiencing slower growth than expected, forecasts remain positive. The economy grew less than predicted in the second quarter, but maintained a healthy pace. Consumer spending remained strong this year, and the government has spent a heavy portion of funds on infrastructure. As a result, the institute for national statistics has suggested that Colombia’s economy has seen an increase of approximately 4.3% in the financial period of April through June.
Although recently submitted statistics have suggested that Colombia’s economy could be experiencing slower growth than expected, forecasts remain positive. The economy grew less than predicted in the second quarter, but maintained a healthy pace. Consumer spending remained strong this year, and the government has spent a heavy portion of funds on infrastructure. As a result, the institute for national statistics has suggested that Colombia’s economy has seen an increase of approximately 4.3% in the financial period of April through June.
On average, economists within the country revealed expectations at a slightly higher level, typically 4.5%. However, Colombia still remains one of the strongest countries in the world in regards to economic growth.
DANE, the national statistics institute for Colombia, tracked nine different industries to see how they fared in the current economic climate. Out of those nine industries:
* Construction leads the economic growth, with an increase of approximately 10.15%
* Followed by the financial services at 6.12%.
* Social services showed an increase of 5.81%,
* Only two sectors, the energy and mining industries, reported modest declines.
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The Reason behind Colombia’s Strength
The boost in construction was caused primarily by a significant increase in civil engineering projects, about 18%. The financial services industry grew due to an 8.82% rise in leasing action, whereas social services saw a boost due education and health activity.
New Roads, New Opportunities
Over the past year, Colombia’s strong, oil-driven economy has made it a powerful place in the region, driven largely by infrastructure spending by the government. Evidently, travel on roads between Colombian cities has been complex for some time now, due to a lack of an adequate highway network combined with large mountain ranges. However, the government recently created a multi-billion dollar agenda to expand and repair older highways, as well as build new ones. As a result, the spending on public products jumped by 16%.
Experts suggest that growth within the industry will continue for the forecast period, to 2018. The benefits come as a result of improved investor sentiment, government focus on residential construction and infrastructure, and anticipated global recovery (well, as long as populations continue to vote for socialists such as Obama and Hollande there may not be a recovery any time soon).
Colombia’s results, however, have come in sharp contrast to some of its Latin-American neighbors. Mining nations such as Chile and Peru have seen their export prices weaken significantly for minerals like copper.
Unimpressive Brazil
In Brazil, the economy has seen contractions of as much as 0.6% during the second quarter, following a 0.2% fall in the first quarter. Brazil is even expected to continue to see drops for the remainder of this year. Colombia, on the other hand, is expecting a full year of growth, around 5%, despite lower oil output because of rebel attacks, and declining oil prices.
