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Colombia’s economy surprises with a growth of 1.1% in the first quarter

BOGOTÁ (Reuters) – Colombia’s economy expanded 1.1% in the first quarter, due to the reopening of several sectors amid the coronavirus pandemic, the government reported on Friday.

The expansion beat the projections of analysts who, according to the median of a Reuters poll, expected a 1% contraction.

The data was also better than the projection that the Central Bank’s technical team had, of a decrease of 0.3%.

The expansion between January and March also exceeded that of the same period last year, of 0.6%.

The manufacturing industry grew by 7%, financial activities by 4.9%, and the agricultural sector by 3.3%, DANE reported.

In contrast, contractions were recorded in the mining sector with 15%, in construction with 6%, in the area of ​​public services with 1.3% and in commerce with 0.8%.

“After three consecutive quarters with annual contractions, we are seeing the first real expansion in this first quarter of 2021,” said DANE director Juan Daniel Oviedo in a virtual conference.

If compared to the fourth quarter of 2020, the fourth economy in Latin America expanded by 2.9% in the first three months of the year.

The issuing bank improved its GDP expansion forecast for this year at the beginning of May to a range of between 3% and 7% with 6% as the most likely figure, from a previous estimate of between 2% and 6% with 4 , 6% as the central level.

Last year the Colombian economy suffered its largest historical contraction, 6.8%.

In contrast, the agency lowered the forecast for 2022 to growth between 1% and 5%, with 3% as the most likely figure.

The collapse of the country’s productive activity due to the coronavirus pandemic led the monetary authority to reduce its reference interest rate to a record low of 1.75%.

But in recent months, voices have grown that expect a future increase in the cost of money towards the end of the year, due to an acceleration of inflationary pressures given the better prospects for economic growth.

(Reporting by Nelson Bocanegra; Additional reporting by Carlos Vargas; Edited in Spanish by Javier López de Lérida)

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