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Several sectors of the Colombian economy are already in recession, according to new data

According to the president of the Federation of Merchants, despite official data isn't out, early indicators show Colombia is in a recession

Gabriel Micillo•Wednesday, February 28, 2024•1 min read

According to the president of the National Federation of Colombian Merchants (Fenalco), the country is entering a recession.

According to the spokesman for the merchants, the private sector is experiencing an alarming state of prostration, reflected in the decline of the Gross Domestic Product (GDP), as reported by the National Administrative Department of Statistics (Dane) on February 15, and the pronounced negative growth of the industry (-3.5%), commerce (-2.8%), and construction (-4.2%); precisely the sectors that generate the most employment in the country.

If nothing is done, the consequences on unemployment levels will increase in the coming months. Fenalco agrees with the National Association of Financial Institutions, which stated that excluding public spending activity, “productive sectors are practically already in recession as a result of the negative economic growth.”

This comes in the context where the Minister of Finance, Ricardo Bonilla, had mentioned a few months ago that the country was on the brink of a “technical recession.” Additionally, in a scenario of high interest rates (12.75% for the Bank of the Republic), as well as a high dollar price (around $4,000) and inflation (8.35% year-on-year in January 2024).

For the entire year (2023), the total GDP grew by 0.6%, but if public administration is excluded, the increase was only 0.3%, with the aggravating factor that the second, third, and fourth quarters recorded negative balances.

If the government does not urgently and concertedly design an anticyclical plan, the performance of GDP this year could be even worse than in 2023, resulting in a impoverishment of the population.

“It would be terrible if a part of the country’s middle class becomes vulnerable population, which, at the rate we are going, would be perfectly possible if the government does not act decisively and boldly. An emergency plan can no longer wait,” concluded the president of Fenalco, Jaime Cabal.

ABOUT THE AUTHOR See More
Gabriel Micillo
Gabriel is a certified public accountant graduated from UNNE (National University of the Northeast, Argentina) and a software developer, currently pursuing a Master's degree in Finance and Economics. With nearly 8 years of experience working for accounting firms and brokerage firms. Concurrently, he has produced economic and financial reports on the current state of regional economies for the clients of the establishments where he has worked. Additionally, he assisted colleagues like Ignacio Teson in the drafting and editing of articles on similar topics in English language.

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