What Jumps Out: Busy Week Ahead

Last week ended with the Central Bank increasing rates from 10-11%, fully as expected but FinMin Ocampo was part of a unanimous vote of 7-0 despite public comments suggesting rate increases wouldn’t slow supply side inflation. His reply was that he wanted to help the messaging in terms of calming the markets. However, the other issue (please explain this to me) is the November meeting is coffee and biscuits with no rate decision. Last week may have been an attempt to get ahead of the curve in case Saturday’s October CPI number from the DANE has a nasty surprise.

Today, if the rumor mill is correct, President Petro will announce a Natural Disaster Emergency. This will allow him to take certain decisions related to the ongoing brutal rainy season the country is suffering. 2022 is set to be the wettest year on record – people are dying, crops are rotting, and roads are disappearing under landslides. Key truck routes to the coast and between major cities are frequently closed to freight trucks.

Many would argue this decision is months overdue and hopefully it won’t get politicized, as everything currently seems to do, as there is a desperate need for many of the population to at least be able to move from place to place. This move would allow Petro to redirect resources that have been earmarked for other uses but are not being utilized.

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

Talking of politicization, Ecopetrol and the oil sector finds itself in the eye of the storm.

What the good Lord gives…….etc. Having no sooner announced that exploration licenses will be looked at under his administration, which brought some relief to the markets, President Petro had the Chairman of the Ecopetrol Board removed less than two days after he had been voted in – and replaced with a candidate more favorable to the Government. Finance Minister Ocampo blamed it on the actual board saying they had jumped the gun – but regardless of the reason, mixed messaging is a dangerous thing.

On the macro front from the DANE this week we have the latest Urban Unemployment data for September. The expectation is for 10.7% which would represent another improvement in the situation.

The other key number is September Exports where the consensus is US$5.02bn – that would be US$500mn above a very disappointing August number which led to a US$2bn trade deficit, the kind of numbers that Colombia cannot continue to register.

As mentioned, October CPI is due on Saturday and there is the expectation of another increase from 11.44% to 12.14% – fingers will be firmly crossed at many local institutions that there is no big surprise.

Last BUT NOT LEAST, Finance Minister Ocampo last week suggested the tax reform will be voted on this week. That remains to be seen but either way, the sooner this soap opera is concluded the better so that everyone can get on with organizing their lives – the same is true of the minimum wage.

Should be enough to keep us occupied this week – if you need more, the Linked In video is below.

https://www.linkedin.com/posts/rupert-stebbings-927b6316a_what-jumps-out-busy-week-ahead-last-week-activity-6992818773921517568-VuHu?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