Colombia’s economy grew 12.6% in the second quarter, beating expectations

By Carlos Vargas and Nelson Bocanegra

BOGOTA, August 16 (Reuters)Colombia’s economy grew 12.6% in the second quarter, the government statistics agency said on Tuesday, beating market expectations of 11.25%.

Analysts in a Reuters poll last week said the Andean country’s gross domestic product (GDP) would rise on the back of domestic consumption, recovering employment levels and reactivating industry.

The figure also beat the central bank’s forecast of an 11.5% expansion in the second quarter.

“This puts us on a growth trajectory that we have seen since the second quarter of 2021,” said Julieth Solano, acting deputy director at government statistics agency DANE. “quarter-on-quarter, we had better growth.”

Growth between April and June was led by the entertainment and leisure sector, which increased by 36.5%, retail trade, which increased by 23.3%, and manufacturing, which increased by 20 .3%.

The mining sector recorded 0% growth, while the agriculture and real estate sectors spent only 1% and 1.9% respectively.

DANE revised its economic expansion for April and May upwards to 12.2% and 17.2% respectively. In June, the economy grew by 8.5%.

In the first six months of this year, the expansion was 10.6%.

The economy grew by 18.3% in the second quarter of 2021, after rebounding from the effects of the COVID-19 pandemic.

Colombia’s economy grew 1.5% in the second quarter from the first, the agency said.

New President Gustavo Petro has promised to boost agriculture, renewable energy and tourism in a bid to steer the Andean country away from oil and mining.

Sound 10-the government of a day has proposed tax reform that could potentially add some $11.5 billion a year to government coffers to fund social programs.

Last month, the country’s central bank raised its growth projection for this year to 6.9%, although it lowered its outlook for 2023 to 1.1%.

The bank’s board raised the benchmark interest rate to 9% – its highest level since February 2009 – as part of its continued effort to meet a two-decade high in inflation.

Year-over-year price growth was 10.21% in July.

Colombia’s new tax law targets oil exports to fund social spending

(Reporting by Carlos Vargas and Nelson Bocanegra Writing by Julia Symmes Cobb; Editing by Mark Porter and Lisa Shumaker)

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