Colombia reported GDP growth today less than expected. Colombia (GXG) is part of our Select Countries portfolio.
BOGOTA, Dec 20 (Reuters) – Colombia posted surprisingly weak third-quarter growth on Thursday as the global slowdown bit into expansion and boosted the likelihood policymakers would cut the benchmark interest rate to spur the sluggish economy.
The Andean country’s gross domestic product grew just 2.1 percent in the third quarter from the year-ago period – its slowest pace since the third quarter of 2009 – and well below analysts’ expectations.
The result was also much slower than the 7.5 percent expansion recorded in the same quarter last year.
The economy also contracted 0.7 percent in the third quarter from the previous three months, hurt by poor performances in industry and construction, the official statistics agency said.
We generally look for countries with rising growth and a rising currency for the Select Countries portfolio so this is a bit of a disappointment for us. The Peso was higher today so that part of the equation is intact but the slowdown in growth is a surprise. Some of the slowdown may be related to the general weakness in the global economy during the quarter but the slowdown in construction is probably more a domestic issue. Public works spending was also down 15% in the quarter which also had an impact. We’re not sure yet the source of the weakness. We will be watching this situation closely.
