By Nelson Bocanegra
BOGOTA (Reuters) -Colombia’s economy likely grew 2.6% in the second quarter from the year-ago period, a Reuters poll on Friday showed, thanks to strong domestic consumption even as above-target inflation keeps interest rates from coming down.
Thirteen analysts in the survey forecast economic growth of 2.0% to 2.9% for the three months through June, for a median estimate marginally below the central bank’s 2.7% estimate and the 2.7% logged in the first quarter.
Wilson Tovar, director of economic studies at brokerage Acciones y Valores, said “good general aggregate demand dynamics” were driving trade, agriculture and the financial sector.
Consumption and consumer confidence improved as declines in interest rates and inflation from a year ago stimulated investment and demand for credit, he said.
Colombia’s statistics agency DANE is set to publish its GDP data on August 15.
The analysts polled by Reuters maintained their economic growth estimates at 2.6% for this year and 2.8% in 2026. Colombia’s central bank’s technical team predicts slightly higher growth, at 2.7% and 2.9% respectively.
Inflation risks and a worsening fiscal situation would limit further economic growth and slow the central bank’s interest rate cuts, they added. The bank has so far cut its benchmark rate only once this year.
Last week, the central bank maintained its rate at 9.25%, though the board’s government representative had pushed for a 50 basis point cut.
“Colombia is growing, but the fiscal front remains a major problem,” Pantheon Macroeconomics’ chief Latin America economist Andres Abadia said.
“Furthermore, credit deterioration will continue to make debt more expensive and slow investment in strategic sectors. Without a clear signal on fiscal policy, growth will remain fragile.”
(Reporting by Nelson Bocanegra; Writing by Sarah Morland; Editing by Richard Chang)
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