Colombian Economy Grew 1.6% in January 2024

The Colombian economy grew by 1.6% during the month of January 2024, driven mainly by the good performance of the agricultural sector. Specifically, the activities that favored economic growth were agriculture, livestock, fishing, mining and other primary activities. The increase in this sector was 10.26%.

According to the data released yesterday by the National Administrative Department of Statistics (DANE), with this balance, January represents the third consecutive month of positive figures, after a complicated 2023, which experienced little growth. In November 2023, it was 1.94%; in December, 0.12%; and in January, 1.6%.

Although this is a positive figure, January’s growth is the lowest in the last three years.

Industry and construction down

In the secondary sector the result was negative. Within this classification are industry and the construction sector. With a decrease of 4.99%, the decline was especially notable in manufacturing and construction, which have experienced contractions during the last eleven months.

Meanwhile, tertiary areas, such as commerce, increased by 1.03%. The services sector includes restaurants, health services, communications, security, education and entertainment.

Of particular concern is the decline in the secondary sector, especially in construction, due to the number of direct and indirect jobs it generates in Colombia. Sales and the start of new developments continue to fall, while the sector calls for greater public investment to overcome the situation.

Growth returns

After a complicated year, the quarter comprised by last August, September and October marked the largest decrease of the economy in the country. According to official figures from DANE, in August the adjustment was -0.15%, in September -1.23 and October -0.98%. In fact, Colombia experienced a contraction of -0.3% in the third quarter of last year.

It was a very critical period, when some sectors even talked about a possible recession, a situation that occurs when a country has two consecutive quarters in negative numbers. As things turned out, this reality did not occur in Colombia, as the figures became positive again, with a net growth in the last quarter of 0.3%, although the growth is still weak.

2023 ended with a total economic growth of a meager 0.6%, a positive figure, but below the forecasts made at the beginning of the year by both the Central Bank and international economic organizations, which ranged between 1% and 1.4%.

Undoubtedly, the high interest rates that the country has experienced during the last twelve months have put strong pressure on growth, due to the high cost of credit creating difficulty for companies and consumers in general.

Imports fall

As for imports from the Colombian market, in January they totaled US$4,959 million dollars, representing a decrease of 10.3% compared to the same month in 2023, when they stood at US$5,529.7 million.

Despite the decrease, the trade balance (the total balance between imports and exports) continues to be negative for Colombia. In January it had a deficit of US$959.5 million. However, compared to the same period last year, when the negative difference was US$1,478.1, the deficit reduction is approximately 35%.