Published on Monday, May 15, 2023

Colombia | The first quarter of a year of economic transition

In the first quarter of 2023, GDP grew 3.0% YoY and domestic demand fell 0.1% YoY, due to the deterioration of fixed investment and inventory deaccumulation. External demand contributed positively to growth. BBVA Research has a slight upward bias in its GDP growth projection of 0.7% in 2023.

Key points

  • Key points:
  • Private consumption had a heterogeneous performance: positive in services and non-durable goods, and negative in durable and semi-durable goods. Reflecting this, the services sectors led the performance of the economy, especially those corresponding to financial activities, arts and entertainment activities, and public administration, education and health.
  • The construction sector is the only one, among the 12 major activities, that had a YoY drop. This was explained by the sharp reduction in civil engineering works. At a time of economic slowdown, it is necessary for public spending to be executed quickly and efficiently, as this will help offset the negative effects on employment and the overall dynamics of the economy.
  • BBVA Research maintains a forecast of 0.7% for GDP growth for the full year 2023, although the first quarter result implies a positive, but minor, bias on this figure. In line with the first quarter result, the services sectors are expected to perform the best during the year. This will determine that household consumption in this type of expenditure and the tertiary economic sectors will have the best results. On the contrary, consumption in durable and semi-durable goods and, as a reflection of this, those related to the production of this type of goods, will fall.

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