Colombia’s economy has shown record growth in 115 years

Colombia’s economy exceeded forecasts as it rose at the fastest pace in more than a century, driven by a rebound in consumer demand after easing pandemic curbs. Soaring prices for oil, coal, and coffee also played its role.

A consumption boom and skyrocketing prices for basics like coal, oil, and coffee caused gross domestic product to rocket 10.7 percent last year.

The nation’s statistics agency said that the gross domestic product expanded 10.7% in 2021. According to data compiled by the central bank, that’s the fastest pace since at least 1906.

Overview of the situation in Colombia

GDP increased 10.9% in Q4 from a year earlier, surprising economists surveyed by Bloomberg. Their median forecast was for growth of 9.2%. Output expanded 4.4% from the previous quarter.

Central banks in Latin America withdraw emergency stimulus as countries rebound from the current crisis. Inflation flies in all the region’s major economies. Since September, Colombia’s central bank has raised its benchmark interest rate by 2.26 percentage points. Traders are betting on further hikes at its future meetings.

The growth appeared after a 22% surge in retail sales and associated services and a 13% expansion in manufacturing.

Colombia’s best year followed its worst. In 2020 curbs intended to curb the spread of the virus triggered mass unemployment and bankruptcies.

The central bank calculates that output has now returned to its pre-pandemic levels. According to analysts surveyed by Bloomberg, the economy will expand 4.1% this year, outpacing Mexico, Brazil, Peru, and Chile.

In January, annual inflation accelerated to 6.8%, more than double the central bank’s 3.1% inflation target.

Colombia is holding a presidential election by the end of May. Former Bogota mayor Gustavo Petro is a leader in polls. He is popular among the poorer population and has promised to tax the rich and halt oil exploration.