Colombia: Economic growth not expected to improved considerably - Wells Fargo

According to analysts from Wells Fargo, the Colombian economy remained weak in Q2 2016 and is not expected to improve considerably during the next several quarters, the prospects for the country have recently improved after the final agreement between with the FARC.

Key Quotes:

“The Colombian economy continues to adjust to lower oil prices two years after these prices started to tumble. According to the Colombian statistical institute, DANE, the country’s mining sector declined 7.1 percent in the second quarter of the year versus a year earlier, driven by an 11 percent drop in the production of petroleum and natural gas.”

“Colombian GDP growth was 2.3 percent during the first half of the year compared to the same period a year earlier. During this time, the strongest sector was the manufacturing sector, up 5.4 percent, followed by the financial sector, up 4.2 percent. Meanwhile, the weakest sectors were mining, down 5.9 percent, and the agricultural sector, up only 0.1 percent.”

“Although economic growth is not expected to improve considerably during the next several quarters, the prospects for the country have recently improved after the final agreement between the Colombian government and the guerrillas from the Revolutionary Armed Forces of Colombia (FARC). This agreement will have to be ratified by a referendum, but analysts say that the prospect is for the plebiscite to support or ratify the final agreement by the government. This will tend to brighten the future for investment in the country going forward. However, it will be very interesting to see if the country can attract foreign investment in the petroleum and natural gas sector at current oil price levels.”