Colombia could have grown 7.5% in first quarter of 2022

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Colombia could have grown 7.5% in first quarter of 2022

The economy of Colombia could have grown by 7.5% in the first quarter of 2022 compared to the year-earlier period, though this will start to moderate amid inflation pressures, according to a poll released by Reuters on Friday.

The estimates from 13 analysts for economic growth ranged between 6% and 8.30% in the three months ended March 31.

Latin America's fourth-largest economy will have expanded faster than in the prior quarter of December 31, when growth hit 10.8%, if growth is in line with the poll's median forecast of 7.5%.

David Cubides, director of economic research at stock brokerage Alianza, said that domestic demand, high terms of trade and expansionary monetary policy could have contributed to growth during the first three months of 2022.

The rise in inflation, tighter financial conditions abroad and the increase in the monetary policy rate would lead to growth being moderate, he added.

The analysts believe that the country's gross domestic product will expand by 5.25% this year, before growth slows to 3% in 2023.

The economy of Colombia grew by 10.6% last year, compared to a weak comparative period in 2020.

The forecast cooling is partly due to Colombia's central bank's decision to hike its benchmark interest rate by 425 basis points since September last year, to 6%, its highest level since May 2017.

The interest rate is rising as a move to tackle runaway inflation, which hit 9.23% in the 12 months to April, which is far from the bank's target of 3%.

The central bank is expected to raise interest rates by the end of the year, according to analysts' estimates.