picks up further speed in second quarter
In the second quarter, gross domestic product (GDP) grew 4.3% over the
same quarter last year, which was 0.3 percentage points above market
expectations in last month’s Consensus Forecast.
The second quarter figure represented an acceleration compared to
the prior quarter, when activity rose 4.1%, and continues the trend to
higher growth observed since the third quarter of last year.
A quarter-on-quarter comparison implies a slightly slower pace than
suggested by the annual data but confirmed the upward trend, as activity
rose 0.79% in seasonally adjusted terms, which was up from 0.44% the prior
manufacturing and commerce drive economy
Even though the growth rate in construction slowed by 2.9 percentage
points compared to the first quarter, the expansion remained very robust
at 9.3% over the same quarter last year.
Housing construction was the key driver behind the second quarter
growth, as activity expanded a robust 29.4% over the same quarter last
However, a notable 22.0% decline in civil works projects held back
the sector from a more robust expansion.
Aside from financial services, all other sectors exhibited healthy
growth rates, particularly manufacturing and commerce, where activity rose
by 6.3% and 5.3% respectively over the same quarter last year.
consumption benefits from low interest rates and declining unemployment
though aggregate demand and supply data have not been released yet,
preliminary data suggest that private consumption continued along a strong
According to the National Statistical Institute (DANE), real retail
sales rose 7.5% in June over the same month last year, which was up from
the already robust 6.0% growth rate observed in the previous month.
Booming household goods (+29.4% year-on-year) and electric
appliance sales (+26.2% yoy) were the key drivers behind the strong June
As a result of the strong reading, retail sales were up 5.3% in the
second quarter over the same quarter last year.
Declining unemployment is a key factor behind the current robust
private consumption rebound.
July, unemployment dropped again to 12.9% from 14.1% in June.
Furthermore, the current unemployment rate is now well below last
year’s 14.3% level.
growth slowing amid stronger comparison base last year
most recent trade data indicate that investment is likely to have slowed
Capital goods imports experienced a pronounced 12.8% expansion over
the same month last year.
However, the June figure was well below the 26.2% and 20.1% growth
rates observed in April and May respectively.
Strong demand for construction materials was the key driver behind
the June increase, which was followed by transport equipment imports.
Nevertheless, capital goods imports for the second quarter were up
19.8% over the same quarter last year, an improvement from the -2.9%
decline in the first quarter.
engine humming along, as rising domestic demand drives up imports
Export growth remained very robust in the second quarter with growth
reaching 20.3% over the same quarter last year, more than twice the pace
recorded in the first quarter.
Imports increased at an even faster 23.6% clip, as the strong
domestic economy almost tripled demand for imported goods compared to the
Nevertheless, the annual trade balance has narrowed from a US$ 341
million deficit to a US$ 114 million shortfall, as domestic demand drove
up import growth notably.