Slumped industrial, coal sectors slow down Colombian GDP

COLOMBIA’S gross domestic product slowed to a crawl in the first quarter thanks to a contraction in industry and reduction in coal production tied to Cerrejon’s labor strike.
Slumped industrial, coal sectors slow down Colombian GDP Slumped industrial, coal sectors slow down Colombian GDP Slumped industrial, coal sectors slow down Colombian GDP Slumped industrial, coal sectors slow down Colombian GDP Slumped industrial, coal sectors slow down Colombian GDP

 

Donna Schmidt

While the Andean nation’s Finance Ministry forecast 3% growth for the period, GDP expanded just 2.8%, and officials told Bloomberg, 0.3% over the prior quarter.

The news service said the median forecast of 29 economists it surveyed projected growth of 2.7%.

While coal definitely had an impact on the world’s fourth-largest tonnage exporter, Colombia’s performance during the first quarter compares to a 4.8% expansion in Peru, 4.1% in Chile and just 0.8% in Mexico.

President Juan Manuel Santos announced a 5 trillion peso ($US2.6 billion) stimulus package in April aimed at “reactivating” Colombia’s industrial sector and increasing growth this year by 0.7%.

Annual inflation totaled 2% in May, at the lower end of the central bank’s target range, Bloomberg said.

Meanwhile, finance minister Mauricio Cardenas said earlier this month that the country’s economy could grow 4.6% annually without overheating.

That itself is down from a previous projection of 4.8%.

Coal is down an estimated 21% from a year ago due to a pay dispute at Cerrejon earlier this year that resulted in a strike that lasted more than a month.

Not helping matters was the suspension of producer Drummond Colombia’s loading license while the government investigated allegations the company dumped coal into the sea to avoid the sinking of a vessel.

Coal is Colombia’s second largest export commodity after oil.

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