What Jumps Out : Not Much Argument From Me

The transport companies began their campaign of protests against the removal of the diesel subsidy over the past few days. It was far from epic in scale and few would argue their case. Without any price increases this year, the government will need to find somewhere between $2.5-3.0bn dollars to pay those subsidies – why should tax payers support that ? On Saturday the average price rose 20% – more than expected but utterly justified.The 4G road program is reducing fuel costs as there are less hills and much less demanding driving conditions, those highways have to be paid for. Only Venezuela, Bolivia and Ecuador have lower price and it is time for transport companies to grow up.

Equally no one would argue that events in Venezuela over recent works have been deplorable. But it is a sovereign nation and that leaves the options for outside actors very limited. If the US & United Nations can’t budge Maduro it’s highly unlikely Gustavo Petro can, yet there are those criticizing him both directly and indirectly. Whatever happens to Maduro, Colombia needs to be pragmatic, it doesn’t have the luxury of closing the border to trade, low cost gas being a prime example of a product that the country is going to need in 2025. Of course it could be purchased from the US, but would they sell at a heavy discount ?

No argument either from the public or private sector that overnight rates, due to Banco de la República – Colombia sleepy attitude, are higher (10.75%) than they should be. This week Departamento Administrativo Nacional de Estadística – DANE Colombia will release the August inflation data with a MoM decline from 6.86% to 6.38% and the hope is that, having taken August off, the Central Bank will in a few week’s time, cut rates by 1%.

It’s also hard to argue that La Niña is arriving, and it seems bang on schedule. Weather experts predicted a late August start to the rainy season and thus far they seem to be correct. It is expected to run until the end of the year – fingers are crossed that the level of destruction is moderate.

Finally, no-one would argue that the female football stars of Colombia should be the protagonists over the next few weeks as the country hosts the U20 FIFA World Cup, especially after winning 2-0 in their first game. Sadly, the local press spent most of the next day discussing men’s football from around the world – and perhaps sadder still….all very predictable.

Have a great week….and Labor Day !

Roops