The press, particularly those opposing Colombian President Gustavo Petro have spent much of the weekend raking over the coals of his son, Nicolás’, legal problems, and the motivation clearly is to link the scandal to his father. Campaign financing appears to be the focus. However, if they were going to depose every Colombian candidate due to the financial sources — we would never have an election.
Elsewhere in politics, the regional elections are closing in fast (October) and it alway perplexes me to see such celebrity names as Gustavo Bolivar, Jorge Enrique Robledo, and Carlos Fernando Galan queuing up to be Bogotá mayor. An unwieldy city without the resources to set itself on the right path, they are all destined to fail, just as others have been before. That said, Gustavo Petro’s tenure was nothing to write home about — and look where he is now!
In macro terms, we have a busy start to the week from the National Administrative Department of Statistics (DANE) with Monday featuring the real sector data for June. In May, both retail sales (-5.1%) and manufacturing production (-2.9%) fell, and there is little prospect of an improvement.
We also have construction licenses data for June. It has been a difficult 12 months after the boom of mid-2022, but in May licenses rose by 2.9%. On Friday, we saw ready-mixed concrete numbers rise for June by 3% to 579,000 tons. Surprisingly, while supply to housing rose by 3.2% it was civil works (+7.9%) that was the main driver. What makes this surprising is that the same civil works Q2 activity number (-17.9%) was well down year over year.
Tomorrow, we have Q2 GDP and that civil works data will bleed into that number. This will be watched very carefully by both analysts and the institutions as there appears to be some disagreement about the pace of growth in 2023 thus far, with Banco de la República lowering its projection from 1.0% to 0.9% just recently.
On the markets, we are still awaiting any news of the Grupo Éxito sale process, the GEA share swap with the Gilkinskis. Grupo Aval had a poor day in Colombia and the United States after the SEC imposed a $40 million USD fine related to Corficolombiana and the Odebrecht scandal. Let’s see if there is more movement today. All of the above are unlikely to impact the ongoing anemic volumes.
The Colombian peso closed last week below 4,000 to the US dollar, and the currency will again be driven by overseas events given that any government success on the reform program will have to be watered down.