(Bloomberg) — Colombia’s economy lagged expectations in the first quarter as the steepest-ever interest rate hikes damp investment.
(Bloomberg) — Colombia’s economy lagged expectations in the first quarter as the steepest-ever interest rate hikes damp investment.
Gross domestic product expanded 3% in the first three months of the year from a year earlier, the national statistics agency said Monday. Economists surveyed by Bloomberg had expected expected growth of 3.4%. The economy expanded 1.4% from the previous quarter.
The central bank forecasts the slowest growth since the pandemic this year, potentially allowing policymakers to consider interest rate cuts as inflation slows toward its target. Last week, Finance Minister Ricardo Bonilla said he expects the central bank will be able to discuss interest rate cuts in the second half of the year.
Growth and inflation are cooling across most of Latin America, but Colombia and Mexico are the only major inflation-targeting economies in the region that haven’t yet called a halt to interest rate increases.
Read more: Colombia May Consider Rate Cut This Year, Finance Chief Says
The central bank has raised borrowing costs by 11.5 percentage points over the last year and a half to 13.25%, the highest in nearly a quarter of a century.
Inflation slowed to 12.8% last month, after hitting its highest level since 1999 in March. The central bank targets annual consumer price rises of 3%.
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