Colombian retail sales and industrial output fell the most since 2009 in April, raising the chances that the central bank will cut interest rates before year-end.
Retail sales dropped 2.8 percent from a year earlier, the first year-on-year decline since September 2009, the national statistics agency said today. The result was worse than all 16 forecasts in a Bloomberg survey of economists. Industrial output contracted 1.6 percent over the same period, the agency said, compared with the median estimate of 17 economists surveyed by Bloomberg of a 1 percent increase.
Colombia has raised interest rates nine times since the start of 2011, to cool growth propelled by consumer credit growth and record levels of foreign investment in oil and mining. The country’s peso-denominated government bonds may rally tomorrow, sending yields lower, as today’s “very negative” numbers lead traders to bet that the central bank may reverse course and cut borrowing cost, said Jhon Jairo Ramirez, a fixed income analyst at Bolsa y Renta, a Colombian brokerage.
“This will cause analysts to lower their growth forecasts for the year,” Ramirez said, speaking by telephone from Medellin. “This is positive for public debt, because it shows there are lower inflationary pressures and the bank could be disposed to lower the interest rate.”
Colombia’s economy grew 5.9 percent last year, the fastest pace since 2007. The statistics agency publishes its first-quarter gross domestic report tomorrow.