Colombia Economic Outlook. Third Quarter 2019

Summary

Economic growth will continue to be led by investment in view of the expected stabilisation in consumption spending. We estimate GDP growth in 2019 and 2020 will be at 3.0% each year and inflation at 3.3% and 3.2%, respectively. The Central Bank will keep its interest rates stable for a long time.

Key points

• Key points:
• Global growth will stabilise at 3.3% in 2019 and 2020, down from 3.7% in 2018.
• Central banks in developed countries have changed their monetary stance, showing a tendency to cut interest rates again.
• The investment will grow in 2019 boost by civil works and machinery and equipment and in 2020 by the recovery of investment in housing and non-residential buildings.
• Final consumption expenditure will be determined by the future stability of private consumption, conditioned by the labour market, and the deceleration of public consumption.
• In 2019, the current account deficit will stand at 4.4% of GDP, driven by increased imports of machinery and equipment. Then, in 2020, it will be reduced to 3.8% of GDP in line with lower investment in machinery.

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