Colombia’s Leading Economic Indicators Still Diverge

Colombia’s industrial production and retail sales likely continued to show divergent paths in November. RGE expects industrial production to grow by 2.4% y/y (3.5% y/y three-month moving average (3MMA) through September), constrained by external demand, especially from Venezuela; an overvalued currency; low industrial confidence (5.2% y/y) and still-weak energy demand (1.2% y/y). Meanwhile, retail sales likely expanded robustly by 17.7% y/y (15.2% y/y 3MMA through September), driven by the still-high but falling consumer confidence (25.9% y/y), strong car sales (80% y/y) and improving consumer credit conditions (11.8% y/y). This has certainly contained Colombia’s economic growth in H2 2010.

Colombia’s Industrial Production and Retail Sales

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Source: DANE and RGE

Editor’s Note: This post is excerpted from a much longer analysis available exclusively to RGE Clients, LatAm Focus: Brazil to Tighten Monetary Policy; Mexico to Stay on Hold