COLOMBIA NEWS – Colombia’s economy grew less than expected in the second quarter but still expanded at a healthy pace, as the government spent heavily on infrastructure and consumer spending remained strong.
The National Statistics Institute, or DANE, said Tuesday Colombia’s economy grew by 4.3% during the April through June period compared with that period a year earlier. Economists, on average, were expecting a slightly higher 4.5% rate of expansion.
Compared with the first quarter, the economy declined 0.1% in the second quarter, DANE said, which works out to an annualized decline of 0.4%.
Through the first six months of 2014, the economy grew 5.4%, on year.
DANE Director Mauricio Perfetti del Corral told reporters the new data confirm Colombia’s economy continues to grow strongly, and in a sustainable fashion.
“Today it is one of the countries in the world with the strongest growth,” he said.
Construction led growth sectors in the second quarter, expanding 10.2% on year, while the finance sector also did well, growing 6.1% on year. Meanwhile, the mining and energy sector, as well as manufacturing, showed modest declines.
The report also showed Colombia’s economy expanded a revised 6.5% in the first quarter, on year, compared with a previous estimate of 6.4%.
The strength of Colombia’s oil-driven economy over the past year, which has made it a front-runner in the region, has been driven largely by government spending on infrastructure.
Road travel between Colombian cities has always been difficult due to tall mountain ranges and the lack of a good highway network. But the government has embarked on a multi-billion-dollar plan to repair and expand old highways, and build new ones. Spending on public works projects jumped 16% in the second quarter on year.
Neighboring Latin American countries, meanwhile have seen their economies slow down sharply in 2014. Mining nations such as Peru and Chile have seen export prices weaken for minerals such as copper. Peru’s finance ministry recently cut its growth forecast for this year to 4.2% from 5.7%, while some private economists say the economy may grow as little as 3.4%. Last year, Peru’s economy expanded 5.8%.
In Chile, the central bank expects growth of around 2% this year after a 4.1% expansion in 2013. In Brazil, the economy contracted 0.6% in the second quarter after a 0.2% decline in the first quarter, and is expected to see a slight contraction for the full year.
Colombia, meanwhile, is expecting full-year growth of around 5% despite a decline in oil prices, its top export, and lower oil output due to rebel attacks.
Source: online.wsj.com
