Intel stock extends gains after report of possible U.S. government stake
Investing.com -- The Colombian economy grew by 1.7% year-on-year in 2024, falling slightly short of the expected 1.8%. The growth was primarily driven by the agriculture sector, which saw an 8.1% increase, due to high coffee prices, and the arts and recreation services sector, which also grew by 8.1%.
In contrast, the manufacturing and mining sectors contracted by 5.2% and 2.0% respectively.
On the demand side, the economy was propelled by a 7.6% increase in investment, bouncing back from a significant 16.0% contraction in 2023. Private consumption also accelerated, growing by 1.6%, while government spending saw a slight contraction of 0.5%.
In the fourth quarter of 2024, the economy grew by 0.6% quarter-on-quarter, surpassing the anticipated 0.3%. This growth was largely fueled by a 4.96% increase in investment, spurred by construction and infrastructure projects. Government spending also expanded by 1.6% in the fourth quarter, following a contraction in the third quarter, while private consumption saw a slight expansion of 0.26%.
Entering a recovery phase in 2024, the Colombian economy benefited from declining rates and resilient global growth. The increase in domestic demand was primarily driven by private consumption, with investment also showing signs of improvement.
As the economy continues to transition towards a more sustainable growth path, it is expected to grow at 2.2% year-on-year in 2025, and reach a potential growth of 2.8% by the end of 2026. Consumption is anticipated to be the main driver of this growth, while investment is likely to remain subdued due to ongoing policy uncertainty.
Morgan Stanley (NYSE:MS) economists said that they expect the Colombian central bank, BanRep, to cut rates by 25 basis points at its March meeting. The bank predicts inflation will remain above the 3% target, posing increasing risks that could stall disinflation.
Two new board members, appointed by the executive, will be voting for the first time at the March meeting.
Despite expectations that these members will adopt a more dovish stance, focusing more on sluggish growth than persistent inflation, Morgan Stanley believes the inflation risks will keep BanRep cautious, leading to a 25 basis point rate cut at the March 31 meeting.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.