A few weeks ago at the height of the political scandal that saw the coalition of Colombian President Gustavo Petro implode and the de facto suspension of the reform process, I made mention that, on the Colombian Richter scale of scandals, it was little more than a tremor.
Now the earth is properly moving.
Nine years ago, the Odebrecht bribery scandal rocked Latin America — and Colombia was no exception, although little came to pass. Óscar Iván Zuluaga, the Central Democratic Party presidential candidate for 2014, this week resigned from the party after evidence that Odebrecht money had been found in his campaign finances. Other members of the Central Democratic Party have quickly distanced themselves, but there could be a lot of collateral damage as this one is registering much higher on the Richter scale.
Away from politics, it was a very quiet week indeed.
Banco Davivienda PMI for June came in at 49.8, and it continues in the “red” after the 49.9 last month.
The National Administrative Department of Statistics (DANE) reported that exports for May fell by 2.8% year-over-year to $4.5 billion USD, which completes six straight months of declines. The main reason for the fall (FOB terms) was the commodity sector (which dropped 9.1% year-over-year) and in particular oil/derivatives (which fell 34.1%). There was a 69% snapback in coal exports, but that is hardly a product that any country wants to be relying on! All eyes will again be on imports in a couple of weeks. How big will the trade deficit be this time around?
While oil exports struggled, production for May (773k bpd) rose 3.49% year-over-year. The number was down slightly month-over-month, but the year-to-date average production was up 3.48% to 771k bpd. Perhaps now the 2022 urban myth that Petro was set to dismantle the oil sector can be left behind.
On the markets, it was a very quiet week — not helped by July 4 holiday — with little equity activity. And the only Colombian peso activity was due to the strong employment number in the United States on Thursday, which caused it to drop 2%. Nonetheless it’s still looking very solid at the 4,200 COP level to the dollar.