The Colombian economy continues to provide signs of strengthening, fueled mainly by high consumer confidence and trade, the central bank said Friday in the minutes for its last monetary policy meeting.
“The Colombian economy is still showing signs of getting stronger driven by consumer confidence, the high terms of trade, the strengthening of business investment and the recovery of the financial system portfolio,” the central bank said in the minutes for the seven-member board meeting held on Nov. 19.
The central bank expects the economy to grow 4.5% in 2010 and 2011. The central bank, however, also warned that some indicators suggest that growth in sectors such as industry, electricity and transportation could moderate.
The economic expansion in the third and fourth quarter was likely driven by domestic demand, the central bank said. “The information for the third and fourth quarters suggest that domestic demand is showing an expansion that is slightly above what was registered in the first half of the year,” the central bank added.
The Colombian economy is recovering from a tepid performance in 2009, when it expanded 0.8%. In the second quarter of this year, the gross domestic product was up 4.5%. Consumer prices declined 0.09% in October while inflation over the 12-month period through October was 2.33%.
The central bank said inflation readings show with a “high degree of confidence that inflation will be in the lower half of the long term target range in 2010 and 2011” which stands at 2% to 4%.