Cardenas Says Colombia 3Q GDP Growth Accelerated Close to 5%Matthew Bristow and Oscar Medina
Colombia’s economy grew close to 5 percent in the third quarter from a year earlier, according to preliminary figures seen by Finance Minister Mauricio Cardenas, led by construction and a recovery in coffee farming.
Growth approaching the minister’s estimate would be the fastest in more than a year, and quicker than the median forecast of 4.3 percent in a Bloomberg survey of 30 analysts. The national statistics agency publishes its gross domestic report Dec. 19, a day before the central bank’s final policy meeting of the year.
“The data we have point to very good growth,” Cardenas told reporters in Bogota today. “Third-quarter growth was close to 5 percent, based on the partial information we have now, which is construction, agriculture and mining.”
Colombia cut its policy rate by two percentage points between July 2012 and March, as industrial output slumped and inflation slowed to levels not seen since the 1950s. The central bank will hold the rate at 3.25 percent, the lowest in South America, for a 10th straight month at its Dec. 20 meeting, according to analysts surveyed by Bloomberg.
Growth in the construction industry was “excellent”, while the coffee sector expanded “well above 20 percent”, Cardenas said.
The annual inflation rate slowed to 1.76 percent last month, below the lower bound of the central bank’s 2 percent to 4 percent target range, as food and housing costs fell.
In the minutes of their November meeting, some central bank policy makers argued that the economy could require a further “monetary boost” if slowing inflation were combined with economic growth at or below expectations.
The minister’s remarks imply less chance of a reduction in borrowing costs at the central bank’s policy meeting this week, said Camilo Perez, chief economist at Banco de Bogota. Cardenas chairs the bank’s seven-member policy committee.
‘In the minutes they gave two conditions to cut interest rates, one of which was a negative growth surprise, which apparently isn’t going to happen,’’ Perez said in a phone interview. “With this data, even the minister won’t be able to vote for a cut.”
The yield on sovereign peso bonds maturing in 2015 rose 0.02 percentage point to 4.501 percent.
Peru’s economy grew 4.4 percent in the third quarter from a year earlier, its slowest pace in four years, while Chile’s expanded 4.7 percent. Mexico, Chile and Peru all cut interest rates in the fourth quarter.