By Nelson Bocanegra
BOGOTA (Reuters) – Colombia’s economic growth is likely to have slowed in the third quarter of the year due to more moderate domestic consumption amid rising interest rates and rampant inflation, a Reuters poll revealed on Thursday.
According to the median of 15 analysts’ estimates, Latin America’s fourth-largest economy will have expanded 6.7% between July and September.
Economic growth during the year-earlier period hit 13%.
Estimates for third-quarter economic growth ranged from 4.8% to 7.5%.
If the median proves correct, Colombia’s gross domestic product (GDP) in the three months to Sept. 30 would also have grown more slowly than in the second quarter of 2022, when it expanded by 12.6% versus the second quarter of 2021.
The median forecast was slightly higher than projections by the country’s central bank, which sees third-quarter economic growth at 6.4%.
“Although the economy still shows symptoms of powerful aggregate demand, we have a strong comparative period, more cautious consumers as inflation continues to put pressure on their wallets, while entrepreneurs are assuming higher financing costs,” said Wilson Tovar, chief economist for brokerage Acciones y Valores.
Third quarter GDP growth data will be published next Tuesday.
Colombia’s central bank has hiked its benchmark interest rate to 11%, the highest level in 21 years, in a bid to slow inflation.
The Andean country saw 12-month inflation hit 12.22% in October, the highest level since 1999.
Median estimates suggest Colombia’s economy could grow by 7.70% this year before slowing to 1.60% in 2023, as central banks raise rates around the world to cool inflation.
“We’re expecting the central bank to follow its path of increasing the interest rate, at least until the first quarter of 2023 and right up to levels close to 12.5% or 13%, because inflation is not letting up,” Tovar added.
(Reporting by Nelson Bocanegra; Writing by Oliver Griffin; Editing by Jonathan Oatis)