The Colombian economy is showing growth, although it remains modest. The Economic Monitoring Indicator (ISE) for February indicates a slight increase of 2.49% during the month. This growth is lower than the 2.7% observed in February 2023 and significantly below the 6.8% increase seen in February 2022. Growth was driven primarily by the primary sector, which grew by 7.7%. In contrast, the secondary sector declined by 2.6%, while the tertiary sector contributed only 2.45% to the overall growth. This marks a continued 12-month downward trend for the secondary sector.
Primary activities involve jobs directly tied to natural resources, such as agriculture, fishing, and forestry, playing a crucial role in producing raw materials and food. Tertiary activities are service-oriented and include healthcare, education, tourism, and financial services, which are vital for the economy as they provide essential services to citizens and businesses.
The National Administrative Department of Statistics (DANE) reported a 1.57% decrease in the monthly performance of the indicator compared to January, adjusting for seasonal effects and calendar variations. These are some worrying signs for Colombia’s economic growth.
What drives Colombia’s economic growth?
The economy is mostly driven by the primary sector, including agriculture, livestock, forestry, fishing, and mining, with an annual growth rate of 7.7%. This is higher than last year’s rate of 2.9% but lower than the 10.2% recorded in January.
The secondary sector, comprising manufacturing and construction, has declined by 2.6% compared to February last year. Adjusted for seasonal and calendar effects, the decline is even more noticeable at 4.24%, according to DANE.
The tertiary sector, which includes electricity, gas, water distribution, waste management, wholesale and retail trade, and vehicle repair, grew by 2.45%. Within this sector, trade increased by 1.2%, improving from January’s -1% but remaining below the 4.1% growth seen in February 2023.
Financial and insurance activities experienced a 2.9% decline, a drop from January’s 0.4% and significantly lower than the 8.4% growth recorded in the same period in 2023. Experts attribute this decrease to a reduction in credit applications on the market.
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