A more favourable inflation outlook and lower interest rates promise to prompt a recovery in consumption still recovering slowly. Archive Rebound underway. Simultaneously, DANE published global supply and demand figures, which indicates that domestic demand received a boost from strong investment growth and, to a lesser extent, from a recovery in consumption. The continued improvement in economic indicators has affected the growth outlook in this months Consensus Forecast, which has improved again. A more optimistic growth outlook is also reflected in next year s growth figure, which was raised from last month.
Inflation continues on downward path.
Despite the pick-up in economic activity, consumer price increases remain contained. Transportation costs accounted for a largest share of the price increase due to rising gasoline prices, while food prices spiked as a result of the end of the harvest season, which is tightening supply. This month s Consensus Forecast indicates that participants have become more optimistic regarding the inflationary outlook for the remainder of the year. The improved inflation outlook should help avert any substantial hikes in interest rates for the remainder of the year, which in turn will help sustain the current growth trend. This month s Consensus data indicates that interest rates are likely to climb a bit towards the end of the year.