Colombia’s economy expanded more than the market expected in 2017 compared with the previous year, even as growth remains tepid in Latin America’s fourth largest economy, the government said on Thursday.
Gross domestic product rose 1.8 percent last year – the lowest in eight years – versus 2 percent during 2016, the government’s DANE statistics agency said.
Growth was in line with government estimates, but higher than the 1.6 percent expected by the market. The government forecasts 2.7 percent growth this year.
The economy grew 1.6 percent during the fourth quarter versus the same period in 2016, when it expanded 1.8 percent.
Colombia has spent two years grappling with the fallout from a decline in oil prices and an ongoing drop in consumer spending, but Finance Minister Mauricio Cardenas and the central bank have said that the worst is over and growth should pick up over the year.
“Better than market expectations. This is positive, but the most important thing is that all forecasts for this year are better,” Cardenas said from his Twitter account.
Agriculture and finance were the top sectors boosting annual growth, expanding by 4.9 percent and 3.8 percent respectively. Social services rose 3.4 percent and the retail sector was up 1.2 percent.
The mining and energy sector, an important engine of growth, contracted by 3.6 percent, construction fell 0.7 percent, and manufacturing shrank by 1 percent.
Colombia’s GDP rose 0.3 percent during the fourth quarter versus the third, DANE said.
In a bid to stimulate growth, the central bank’s board has cut 325 basis points from the benchmark interest rate since December 2016, even as it struggled to contain inflation. The seven-member board surprised the market in January by trimming 25 basis points from the rate to 4.5 percent.
(Reporting by Helen Murphy; additional reporting by Nelson Bocanegra, Luis Jaime Acosta and Carlos Vargas; Editing by Phil Berlowitz)