What Jumps Out: The Week That Was

This week has been a relatively quiet week in terms of news and whilst every week is unique in itself, there seems to be an overall calming of the situation in Colombia. Some of this may be down to the US holiday and lack of volatility overseas but Petro has now completed well over 100 days and despite the worst fears, the country is still standing, in fact the economy remains in rude health, malls are packed, and airport car parks are full. Of course, this comes with a cost as CPI and rates rise – but Colombia is in good company on that front.

Today the Central Bank will sit down for a coffee and a chat but as no decision will be made, expect very little in terms of post meeting commentary. What we did see from the latest Fedesarrollo survey was the expectation that interest rates will rise to 12% by year end, that is up from 11.5% in the last survey – that means a 1% hike in December.

Rupert’s opinions & analysis as an independent expert contributor are his own and not necessarily those of Finance Colombia or the BVC.

The bank was also in the news yesterday after a court ruling that annulled the appointment of co-director Alberto Carrasquilla on grounds of gender balance. It remains to be seen what happens but potentially this opens the door to his removal and replacement by a female candidate.

The survey overall saw a continued warming of sentiment with not just interest rates but GDP and Inflation expectations also rising – although, as per the Bloomberg survey last week – we are seeing a more modest GDP outlook for 2023.

The same Fedesarrollo released their Industrial (-0.4%) and Retail (17%) Confidence data – both were down as expected, there are no consensus numbers, but perhaps more dramatically than anticipated. The retail number was at a 2-year low whilst we haven’t seen a negative Industrial reading since May 2021.

The next taxi off the rank is the Minimum Wage and we are seeing a lot of commentary on that. With Inflation heading for 12%+ in 2022 we have the unions demanding 15%. But the government needs to be strong here, if possible, because so many products and services benchmark themselves off the minimum wage settlement that getting inflation under some sort of control will become difficult if they let the unions have even close to their way.

Please find below to the end of week video (LinkedIn):

https://www.linkedin.com/posts/rupert-stebbings-927b6316a_what-jumps-out-the-week-that-was-this-activity-7001874221656068096-vj3N?utm_source=share&utm_medium=member_desktop

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That is about it for today – remember these are just themes that jump out at me – please refer to your local analyst, economist, salesperson or soothsayer for more details.

My regards to all,

Roops