The month split into two distinct phases, Grupo Cibest’s analysts wrote. Early in August, the Banco de la República (Bank of the Republic), Colombia’s central bank, surprised markets. Its board had voted at a July 31 session to hold the benchmark interest rate at 12% and to build up to $4 billion USD in international reserves through a new options-auction mechanism; when the bank ran the program’s first auction on August 3, buying $400 million USD, according to El Universal, the combination of the rate hold and the new dollar demand pushed the dollar down further against the peso. The mood reversed after August 27, when the government of President Abelardo de la Espriella, who took office August 7, submitted a revised 2027 National Budget to Congress that acknowledged a far deeper deterioration in public finances than previously disclosed.

The peso weakened sharply in the final days of August as the 2027 National Budget rattled markets. (Source: SetFX, prepared by Grupo Cibest; chart: Finance Colombia)

The revised budget raised the government’s projected total fiscal deficit from 5.3% to 7.2% of gross domestic product for 2026, and from 4.5% to 9.4% of gross domestic product for 2027, after incorporating obligations tied to debt service, pensions, health care, payroll costs, energy subsidies and the Fuel Price Stabilization Fund that had previously been underestimated. Grupo Cibest called the disclosure “a necessary reality check” and said clarity on the government’s medium-term fiscal adjustment plan, which has yet to be published, would be critical to the peso’s direction from here.

The 2027 National Budget nearly doubled the projected fiscal gap for both years. (Source: Colombia’s Ministry of Finance, prepared by Grupo Cibest; chart: Finance Colombia)

The currency’s slide happened despite favorable conditions abroad. The US Dollar Index fell 0.5% in August after a weak employment report, while Brent crude gained 0.3% to close the month at $90.04 USD per barrel — a combination that would typically support, not weaken, an emerging-market currency like the peso. Grupo Cibest said the divergence showed the depreciation was driven almost entirely by local, not global, factors.

A weaker dollar and firmer oil prices should have supported the peso in August; instead it depreciated. (Source: LSEG Workspace and SetFX, prepared by Grupo Cibest; chart: Finance Colombia)

Even with August’s reversal, the broader trend remains firmly in the peso’s favor. The exchange rate stayed below both its 50-day and 100-day moving averages for most of the month, and Grupo Cibest noted that the medium-term technical structure remains bearish for the dollar, with all three moving averages still trending downward. Analysts at Corficolombiana attributed the rally mainly to lower political and fiscal risk premiums tied to Colombia’s change of government rather than to any structural improvement in economic fundamentals, and it expects a partial correction in the exchange rate in the months ahead.

The exchange rate closed August below all three moving averages, a sign of sustained peso strength. (Source: LSEG Workspace, prepared by Grupo Cibest; chart: Finance Colombia)

The strong peso has split Colombia’s export sector from its import-dependent businesses and consumers. Between January and May, exporters stopped receiving approximately $12.2 trillion COP in revenue as a direct consequence of the currency’s appreciation, according to the same Corficolombiana analysis, with coal, bananas, flowers, coffee and labor-intensive manufacturing among the hardest-hit categories. Fenalco noted that those losses have been compounded by higher labor costs and by new United States tariffs on Colombian goods, which combine a 10% universal duty with an additional 2.5-percentage-point surcharge tied to labor-standards enforcement, and it pointed to Colombia’s 12% policy rate, one of the highest in the region, as a magnet for the short-term capital inflows that have helped drive the appreciation. Bruce Mac Master, president of the National Business Association of Colombia (ANDI), said in August that the trend was already undermining the country’s competitiveness as an exporter.

“The dollar is reaching levels of COP3,000, which without a doubt puts us in a very complex situation and takes away our competitiveness. It significantly affects exporters’ income when they convert it into pesos.”

— Bruce Mac Master, president, ANDI

Mac Master said Colombia should study measures to discourage those capital inflows, arguing that the central bank’s inflation mandate now competes with a bigger risk: eroding the country’s productive base. Corficolombiana’s own numbers suggest the picture is more mixed than exporters’ losses alone would indicate. The research firm estimated that cheaper imports saved Colombian businesses and households about $15.6 trillion COP over the same five months, for a net national benefit of roughly $3.4 trillion COP, and it found no significant widening of the trade deficit so far, in part because Colombia’s oil and gold exports have benefited from higher international prices even as their peso-denominated value has been squeezed by the exchange rate.

Tourism has felt a similar split. The association of travel and tourism agencies, Anato, told La República that the arrival of non-resident visitors fell 1.6% between January and May compared with the same period in 2025, as the stronger peso made Colombia a less attractive low-cost destination for foreign travelers. “The appreciation of the Colombian peso can create the perception of a more expensive country for foreigners, a situation that is worsened when combined with risk factors such as informality, security perceptions and travel warnings,” the association said. Anato’s executive president, Paula Cortés Calle, said the currency move complicates outbound travel as well: although a weaker dollar is usually seen as an incentive for Colombians to travel abroad, she said, the operational reality for travel agencies is more complex because of the time gap between quoting a trip and paying international suppliers.

Grupo Cibest expects the exchange rate to trade within a COP3,100-COP3,300 range in September, with risk running in both directions. On the upside for the dollar, the firm is watching the government’s promised Economic Rescue Act proposal, which it said would be critical in assessing Colombia’s ability to stabilize its public debt trajectory, along with continued pressure on US dollar liquidity. Foreign exchange intermediaries’ spot dollar cash position stood at $1.4 billion USD on August 9 before turning negative later in the month; Grupo Cibest expects it to settle near $800 million USD, well below the 2026 year-to-date average of $3.1 billion USD.

Dollar liquidity among foreign exchange intermediaries tightened sharply in the second half of August. (Source: Superintendencia Financiera de Colombia, prepared by Grupo Cibest; chart: Finance Colombia)

On the downside for the dollar, Grupo Cibest pointed to continued carry-trade activity, in which investors borrow in low-rate currencies to invest in higher-yielding Colombian assets, as well as to the central bank’s plan to keep purchasing close to $400 million USD in reserves per month through September. Additional support for the peso could also come from international aid tied to the reconstruction effort following the magnitude-7.4 earthquake that struck Chocó and neighboring departments on August 10.

As of September 7, the exchange rate stood at COP3,126, near the middle of Grupo Cibest’s forecast band, according to a market report carried by El Universal. Colombia’s August inflation figure, due the same day, was expected to remain above 6%, a reading that would keep pressure on the central bank to hold its policy rate steady even as the fiscal picture it revealed at the end of August continues to work through the market.

The Colombian peso was the standout performer among global currencies in June, appreciating 7.4% on the month even as the US dollar broadened its strength and oil prices dropped sharply. According to the Monthly FX Market Report published by the research arm of Bancolombia (NYSE: CIB, BVC: BCOLOMBIA), the peso closed the month at 3,415.25 per dollar, a gain of 274 pesos over the period. The report was prepared by the Economic, Industry and Market Research Area of Grupo Cibest, the financial holding group that owns Bancolombia.

The move ran against the grain of the month’s external drivers. The dollar index (DXY) strengthened 2.3% and Brent crude fell 20.7%, a combination that would ordinarily weigh on a commodity-linked emerging-market currency. Instead, the peso rose on domestic factors tied to Colombia’s presidential election, tracking a rally in local assets that priced in a higher probability of a market-friendly outcome.

The election set the tone

The peso’s appreciation was in line with the rally in local assets that followed the first round of the presidential election, which raised the perceived odds of a right-wing candidate’s victory, the report said. That pattern — commonly observed across the region — limited any upside for the dollar after the second round. Abelardo de la Espriella was elected to govern for the 2026–2030 term, winning 49.63% of the vote, or 12,960,166 ballots, in the tightest race since 1994. Iván Cepeda secured 48.67%, or 12,708,312 votes, and conceded after the official tally was released.

Overseas voting favored de la Espriella, at 64%, the report noted, while domestically he drew strong support in central regions, including Norte de Santander at 76%, Casanare at 69%, Santander at 65%, Antioquia at 64% and Huila at 61%. Voter turnout reached a historic high of 26.3 million participants, or 63.6% of the electorate, with blank votes marginal at 1.6%.

Markets reacted positively to the shift in the government’s political spectrum. JP Morgan recommended maintaining long positions in TES, Colombia’s peso-denominated treasury bonds, according to the report; the bank also held a neutral stance on the peso and closed its short positions against the Brazilian real and the Mexican peso. Through the month the dollar traded between 3,385 and 3,613 pesos, with average intraday volatility of 44 pesos.

“The Colombian peso appreciated in June on idiosyncratic factors, defying the global backdrop.” – Economic, Industry and Market Research Area, Grupo Cibest (Bancolombia), Monthly FX Market Report, June 2026

The central bank resumes its hiking cycle

Following a pause in April, the Banco de la República, Colombia’s central bank, resumed its tightening cycle and, by majority decision, raised its policy rate by 75 basis points to 12%. The report characterized the decision as reinforcing a more restrictive stance amid persistent inflationary pressures, in an environment where tensions between the bank and the Executive appeared to have eased. That rate level, it said, is supportive of long peso positions.

Major central banks abroad kept a cautious posture. The Federal Reserve unanimously held its policy rate in the 3.50% to 3.75% range and revised its expected rate path higher, with the median projection for 2026 pointing to a 25-basis-point increase. The European Central Bank raised its policy rate by 25 basis points to 2.25%, a level not seen since April 2025, while the Bank of Japan lifted its rate by 25 basis points to 1.0%, its highest since 1995.

Defying the global backdrop

The peso appreciated on idiosyncratic factors even as the broader environment turned less favorable, the report said. Markets closely tracked the Middle East conflict, where the US and Iran reportedly reached a peace memorandum that included the reopening of the Strait of Hormuz, the lifting of the US blockade on Iranian ports, the release of frozen Iranian assets and a 60-day window to discuss Iran’s nuclear program. In that context Brent prices fell 20.7%, closing at $72.97 USD per barrel, while WTI settled at $69.60 USD, down 20.3% on the month. The report cautioned that the normalization of trade flows would be gradual, citing reported Israeli attacks and episodes of tension between the US and Iran that leave a definitive peace uncertain. Gold prices fell 11.8%, closing at $4,023 USD per ounce, on shifting rate expectations and reduced demand for dollar-denominated safe-haven assets.

The dollar index, meanwhile, strengthened 2.3%, driven by expectations of higher-for-longer US interest rates. Even so, the peso outpaced its regional and developed-market peers by a wide margin. Among the currencies that gained against the dollar in June, the Swedish krona rose 5.2%, the Chilean peso 3.7%, the Swiss franc 3.5%, the Canadian dollar 2.9%, the Brazilian real 2.6%, the Japanese yen 2.1% and the euro 2.1%, while the Mexican peso and the Peruvian sol added 0.9% and 0.5%, respectively. The Colombian peso’s 7.4% advance left the field behind.

The month ahead

The research team expects the dollar to trade within a range of 3,440 to 3,580 pesos in July, against a backdrop of elevated global uncertainty. Markets are likely to maintain a constructive bias following the change in government, the report said, though cabinet appointments and signals on fiscal consolidation from the incoming administration will be key to sustaining the trend.

The bank framed the risks in two directions. Upside risks for the dollar remain linked to the deterioration of public finances: the Ministry of Finance has explicitly highlighted the need to strengthen fiscal revenues through an adjustment of around 1.6% of GDP, a scenario the report said would be necessary to stabilize net debt below 60% of GDP over the next decade. Colombia’s fiscal trajectory has already drawn scrutiny from ratings agencies, with S&P Global Ratings cutting the country to BB- earlier this year on fiscal concerns. Downside risks for the dollar, by contrast, persist in connection with carry-trade strategies, particularly as the central bank resumes its rate-hiking cycle and widens the rate differential that rewards holders of peso assets.

The Monthly FX Market Report was prepared by the Economic, Industry and Market Research Area of Grupo Cibest, with contributions from International FX and Rates Analyst Maria Paula Gonzalez, Chief Economist Laura Clavijo and Macroeconomic Research Manager Jose Luis Mojica, drawing on data from SetFx, LSEG Workspace, the Banco de la República, the Departamento Administrativo Nacional de Estadística (National Administrative Department of Statistics) and JP Morgan.

The US dollar’s global appreciation significantly drove the peso’s performance. The Dollar Index (DXY) rose by 3.2% in July, supported by a more hawkish stance from the US Federal Reserve (Fed), solid economic data from the US, and new international trade agreements. The Fed’s Federal Open Market Committee maintained the federal funds rate at 4.25%-4.50% for the fifth consecutive time, a decision that analysts cited as contributing to the dollar’s strength. US economic indicators, including retail sales, industrial production, and second-quarter GDP, surpassed expectations. GDP grew by 0.7% compared to the first quarter, exceeding the 2.5% annualized estimate.

Looking ahead, Bancolombia projects the USD/COP exchange rate to trade between $4,000 COP and $4,200 COP over the next month.

July also saw the US finalize trade agreements with several partners, including Japan, Indonesia, the Philippines, and the European Union. Negotiations with China also resumed. These developments were noted as a factor in reducing global trade-related uncertainty, which, in turn, supported the dollar.

On the domestic front, the proposed 2026 General Budget (PGN 2026) raised concerns regarding Colombia’s public finances. The budget, which is set to increase to $557 trillion COP, faced scrutiny for a planned rise in primary spending and its reliance on assumptions of lower interest payments and higher revenues. The fiscal figures, revised within a short timeframe, contributed to increased market uncertainty and a higher risk premium for the country.

In the foreign exchange market, the USD/COP pair traded in a range between $3,949 COP and $4,205 COP during July, closing the month at $4,181 COP. This represented a $79 COP increase from the end of June. Daily trading volume averaged $1.2 billion, with an average of 1,928 transactions per day. The average intraday volatility was $46.5, which was in line with the year-to-date average.

Looking ahead, Bancolombia projects the USD/COP exchange rate to trade between $4,000 COP and $4,200 COP over the next month. The forecast maintains a depreciation bias for the peso, citing an elevated risk premium. The report also highlights international trade policy as a dominant factor, noting upcoming deadlines for reciprocal tariffs and a temporary tariff reduction agreement with China. Furthermore, the Central Bank of Colombia’s decision on July 31 to maintain its policy rate at 9.25% is expected to create upward pressure on the year-end rate. It may enhance the appeal of carry trade strategies, posing a downside risk to the peso.

Colombian Peso. Photo credit: Mano Chandra Dhas.

In fact, it is a difficult week for Petro as the job of reforms gets underway; he lost several cabinet ministers, although Alejandro Gaviria (Education) would be the only one that would register on the political Richter scale. The first semester of 2023 was expected to be choppy and it isn’t disappointing. On top of that the Supreme Council has also blocked, for the time being at least, the President’s move to control the energy sector.

With all this, perhaps no surprise to see Petro’s latest approval level drop to 40% in February, from 48% two months ago – who would be a politician?

There was also some very disappointing unemployment data from the DANE. January saw urban jobless rise to 14.5% versus 10.8% in December. The national number also rose to 13.7% from 10.3% last time around. On the bright side when we look at that national number in absolute terms we find that 21.49mn people were gainfully employed versus 20.6mn a year before: an increase of 3.7%. No month can be taken in isolation in a country where 50% of the population work unofficially, but this is a poor number.

In a week when PMI data in China saw the biggest jump in a decade, something which may well benefit Colombia in the medium term, the latest reading for February in Colombia (49.8) was again in contraction territory, although a little better than the 48.5 of January.

The Central Bank had tea and biscuits but offered no update on their opinion of the economy – we will now have to wait until late March to see how far they will be increasing interest rates. The terminal rate expectation is for 13.25%, from the current 12.85%, but it remains to be seen whether that might happen in one hit.

Much will depend on this Saturday’s CPI reading for February – after a better than expected 13.25% last time around, an increase to 13.36% is expected. This would put the MoM reading at 1.66% which would be lower than 1.78% in January.

In corporate news Ecopetrol reported some healthy looking numbers whilst executives from Grupo Argos, Grupo Nutresa and Grupo Sura were in meetings with Abu Dhabi’s IHC who now own sizable holding in the companies. According to the company filings this was part of their regular meetings with shareholders and took place a month ago.

The Peso as expected had a tough week but perhaps not as complicated as anticipated – whilst inversely correlated to DXY the sight of oil prices increasing may have helped.

Wishing you all a good weekend.

Roops

Please find below the LinkedIn Video:

https://www.linkedin.com/posts/rupert-stebbings-927b6316a_colombia-politics-economia-activity-7037387538541465601-lgwT?utm_source=share&utm_medium=member_desktop

From Fedesarrollo this week we had two reports:

Firstly, their monthly financial sector for February survey saw a sense of calm. The expectations for 2023 inflation rose slightly (from 8.89%-9.00%) as did the terminal interest rate (13%-13.25%) but growth for the same 2023 fell from 1.5% to 1.1% – although that remains above many other estimates, including the Central Bank (0.3%). In terms of the COLCAP, Ecopetrol and Bancolombia remain the top picks, but amidst a pessimistic view for the overall market.

Briefly on interest rates, the Central Bank head Villar stated on Thursday that Colombia was close to the end of the tightening cycle and that the impact on inflation should come soon.

Also from Fedesarrollo we had the Retail ($29.7%) and Industrial (3.6%) confidence data for January and both came in better than expected and significantly higher than December – a surprise given the poor Consumer Confidence number (-28.6%) for the same month.

Within the construction sector there is something of a confusing picture. There was a 50% drop in new home sales in January and with mortgage rates, which have never been low anyway, rising sharply, that is understandable. That said, anecdotally, at least here in Medellin – prices continue to rise sharply, that is if you can find anything to buy ! On the public side the 4G projects are largely into the home straight but the 5G works will be coming on line towards the back end of 2023 which will compensate and move that sector forward.

Solid news from the oil sector again as Campetrol reported January production of 773k bpd – down slightly on December’s 784k bpd however it was still 4.6% higher YoY and part of a gradual improvement in the trend which began to manifest itself in October.

Sticking with oil – Brent has had a complicated week and this has been reflected in the Peso which has been struggling. DXY has also largely moved against the Peso due to a mix of interest rate concerns and geopolitical events.

Within the equity market, the MSCI Colcap is still playing with a dangerous support level. In the meantime, Grupo Argos has joined Celsia & Cementos Argos in announcing continued buyback programs, between the three entities approvals are sought for US$200mn.

Wishing you all a peaceful weekend.

Roops

Here is what they might have spent their time discussing.

Finance Minister Ocampo (the adult in the room) on Friday was again discussing the ‘immense’ opportunity that Venezuela represents for the Colombian economy and how it will help in 2023. Also, that there may well be gas imports this year. That is wholly logical on both points. There is pent up demand in Venezuela for many goods that Colombia produces and to not import at least some cut price natural gas would be foolhardy. Nonetheless, a trustworthy payment system has to be built and whilst cheap gas is very welcome – it can’t get to  Nord Stream proportions.

Perhaps the press could also once again ask the question as to why the Central Bank will sit down this coming Friday at one of their four ‘non-decision’ meetings? At a time when sensitivities over inflation and interest rates are so high, it seems (to me at least) illogical for the committee to not be holding a full-blooded meeting, complete with a decision, vote and press conference regarding their latest thoughts.

The COLCAP is creaking. It closed at 1210 on Friday – a support level last seen in December and March of 2022 – there is gap below. YTD the COLCAP is down 6.9% in both dollar and local terms, it is again lagging the rest of the region, Brazil (+1.78%) being the next worst. There are myriad of reason and many locals will blame politics but a good look at Mexico (+14%), Chile (+10.3%), Peru (+2.15%) as well as Brazil itself, will tell is that you don’t need a market friendly capitalist icon in order for markets to flourish.

The Peso equally is suffering and again there is more than one factor involved. There has been an 8% slippage since late January after the post-holiday recovery – some due to DXY’s move against global currencies. But also, we had a 6% slip in oil over that period.

It is also important to note that after a couple of months since we passed over the ‘tax reform’ rapids and entered calm waters – we are now heading into some white water referred to as ‘reforms’. Petro is looking to lower energy tariffs by a further 10% and then it will be on to Pensions and Health. All these areas need reform, there is no question about that – however, kid gloves need to be employed – and perhaps Governmental Twitter accounts disabled.

It’s doubtful it will be a quiet week – but have a good one.

Roops

Please find below the LinkedIn Video :

https://www.linkedin.com/posts/rupert-stebbings-927b6316a_colombia-economy-mscicolcap-activity-7033406136863064064-j6Xf?utm_source=share&utm_medium=member_desktop

As mentioned previously, the first half of 2023 will see the Petro administration launch a number of reforms including pensions and health. On top of that, it remains to be seen how far the government will go with their attempts to influence the energy sector. In part, connected to these reforms we will be seeing a series of protests and counter protests on the streets of the main cities. How big they will be in magnitude remains  to be seen. Colombians up until relatively recently have been somewhat passive in terms of politics but that is slowly changing. That increasing radicalism will be on show this week.

The big number this week will be FY22 GDP. There is no consensus at the moment, but anywhere up to 8% is likely priced in. Whilst we are now in 2023, it would be a mistake to simply shrug this off as last year’s news. 99% of countries on the planet would happily swap their own number for that of Colombia.

Before that we have a raft of other data.

Firstly from Fedesarrollo the latest Consumer Confidence data for January, last time it stood at -22.3% and an improvement to -19.8% is anticipated; more on that later today.

For December we are expecting Imports data ($5.7bn est.) and a slightly improved trade deficit of $850mn. Exports struggled for the month so any upside surprise to Imports could lead to a larger deficit.

We will also have the last look at the real sector for 2022. Retail sales in December (est. 0.9%), ex vehicles and related sectors, have started to plateau, will we see more of the same. Manufacturing production has held up better but the consensus of 3.2% will be down from 4.5% in November.

Finally both the Central Bank and Bloomberg are scheduled to release their latest analyst surveys. Both inflation and interest rates will be in focus.

In terms of the markets this week, it is hard to see anything except a continuation of Colombia following other emerging markets. The Peso weakened last week, but only in line with the dollar moving up. Oil should also impact but evidence suggests the DXY index is far more correlated to the Peso at the moment.

Finally, National Planning Chief Gonzalez says that oil remains key to the future of Colombia and that Ecopetrol (NYSE: EC, BVC: ECOPETROL) should seek to increase production from 750k bpd to 1m bpd. Sadly, Rome wasn’t built in a day and whilst December saw the highest production since Covid struck, we are still years away from getting back to those 2015 levels. The positive note is the government’s recognition of the importance of the sector.

Please find below the LinkedIn Video:

https://www.linkedin.com/posts/rupert-stebbings-927b6316a_colombia-economics-oil-activity-7030873945050370048-wXnr?utm_source=share&utm_medium=member_desktop

Have a great week

Roops

Over the weekend of course the DANE reported January inflation and the 13.25% reading was only slightly above December (13.12%) and was below the consensus of 13.33%. The monthly number of 1.78% was lower than the 1.87% and whilst food (2.46%) continues to concern representing 28% of that monthly increase, it was actually transport (3.98%) which was the largest contributor with 29% of the overall increase. Housing, which includes energy costs, rose only 0.49% and contributed very little.

We remain data dependent, but the January data perhaps suggests the Central Bank decision to only increase rates by 75bps to 12.75% last week was correct.

Foreigners now own $26 billion USD in local Colombian debt.

So what will we be looking at ? Gustavo Petro is likely to continue front and center.

First of all salvos are still being exchanged over the Bogota metro system; whilst the deal is for a raised metro, the president wants it to go underground. Even if practical, which many doubt, it is going to cause huge delays as many aspects will surely have to be redesigned and re-budgeted.

We have yet to hear more on government controls in the energy sector, we have had a few headlines but little else thus far – but it certainly dented the prices of the related stocks last week.

On the markets, eyes remain in China and the Emerging Markets – will the rally continue and how far is it expected to go in 2023 ? Oil is clearly related to this and the Peso as well—at the moment DXY is steering the currency but if oil jumps it will be hard to ignore.

The Peso, depending on the day, has strengthened between 8-10% since its lows, however despite this overseas investors have been active in the early part of 2023.

On the equity markets foreign funds were the largest buyer of assets with net purchases of $60mn USD. The fixed income market has seen the appetizing carry trade drawing in investors once again with net purchases of $536mn USD – foreigners now own a total of $26bn USD in local debt.

It appears the age-old rule related to foreigners being more able to see the wood for the trees continues to hold true in Colombia.

Please find below the LinkedIn Video :

https://www.linkedin.com/posts/rupert-stebbings-927b6316a_colombia-economy-energy-activity-7028332291772796928-7DBe?utm_source=share&utm_medium=member_desktop

Have a wonderful weekend.

Roops

It has been a heavy macro week, which we will get to momentarily, but tomorrow (yes Saturday) DANE will be publishing the CPI data for January and it is expected to climb once again to 13.30%, from 13.12% a month ago. That will be the highest reading since 1999 – look on the bright side, in March 1999 interest rates were at 23%!

Export data was once again disappointing and propped up like a drunk on a bar by coal; not exactly the most popular product to be shipping all over the world. Exports for December totaled US$4.498bn – below the consensus reading of US$4.56bn and also that of November, there was also a 1% decline YoY in FOB terms. Coal rose 27% and contributed a 5.3% increase to the basket, on the flip side oil fell 15.7%. The only honorable mentions go to Metal Manufacturing (+38.9%) & Fruit & Vegetables (+32.3%). In tonnage terms it was even worse with a total decline of 14.5% with Coffee (-6.9%), Oil (-15.7%) & also Coal (-16.6%) all in the red.

The latest unemployment data for December was a reality check with Urban Unemployment at 10.8% (est 9.6%) rising from 9.1% in November, likewise Total Unemployment 10.3% – also rising from 9.5% the previous month. The total number of people working 22.46 million versus 21.49 million 12 months before, the month on month number was down just 18,000 with Agriculture and Vehicle related sectors the weakest performers.

Moving to January and Davivienda PMI was 48.5, whilst anything below 50 represents an economy that is contracting. We have already seen negative numbers in both November (47.3) & July (49.5) but they weren’t consolidated, so we will need to see February. That said Bancolombia in their weekly consumer report continues to see YoY declines during January.

I’ve spent the week watching the Peso quite carefully and unquestionably it seems to be far more correlated, at this juncture to the dollar (DXY) than oil. The week thus far has seen oil slip back 6% along with Ecopetrol whilst both the Peso and DXY were more or less unchanged.

Please find below the LinkedIn Video :

https://www.linkedin.com/posts/rupert-stebbings-927b6316a_colombia-economy-dane-activity-7027223016770043905-e5IU?utm_source=share&utm_medium=member_desktop

Have a wonderful weekend.

Roops