In spite of a contraction in growth, Colombia’s industrial sector is set to grow at 2-2.5% throughout the rest of 2013, according to Colombia’s Ministry of Finance.
“While, yes, it saw four trimesters of negative growth, the de-acceleration of the last trimester (for industrial manufacturers) is going to be less than the first, when we bottomed-out. That is what we are expecting in our forecasts,” Ministry of Finance Director of Macroeconomic Research Luis Fernando Mejia told local reporters in an interview.
After manufacturers saw their sales shrink over the first half of the year, Colombia’s Ministry of Finance forecasts a recovery for the slagging Colombian sector, which has contracted for the past 7 out of 8 months.
The Ministry of Finance has taken some measures to ease currency pressure on the industry. Finance Minister Mauricio Cardenas has held back on its quantity of bond sales abroad. And it has kept up with its dollar-buying policy, which keeps the exchange rate weak against the U.S. dollar, in turn helping manufacturers who export their products abroad.
But some manufacturers still believe they are years behind from the recovery Mejia and the Ministry of Finance project.
“It’s going to take a while for this industry to turn around,” VP of Trade at Bogota-based manufacturer Saint-Gobain Julian Trujillo told Colombia Reports.
“We’re looking at another three years of problems.”
Colombia’s government has tried to keep industrial-sector exports competitive by manipulating the currency. Senior Economist at Bancolombia, Alexander Riveros, says that the exchange rate is only part of the problem.
Riveros says that Colombia severely lacks competitiveness in areas like “transportation, logistics, and cheap fuel supply.”
Some government projects are in the works, like President Juan Manuel Santos‘ plan to complete the nation-wide Ruta del Sol highway, but for Trujillo, a decade of neglect in development has left his company and other manufacturers in the dust.
- Gobierno aspira que industria crezca 2.5% en 2013 pese a constantes caidas (La Republica)
- Interview with Julian Trujillo, VP of Trade (Saint-Gobain)
- Interview with Alexander Riveros, Senior Economist (Bancolombia)