What Jumps Out: Wednesday Vibes

In the absence of much news over the weekend, I have deferred the first note of the week until today.

Overnight we had the latest real sector data from Departamento Administrativo Nacional de Estadística – DANE Colombia which read well.

The manufacturing production numbers, despite the tidy GDP growth, have been spotty, but in May there was a 3% increase (above 2% estimates) in real terms, with sales (2.6%) & employment (0.3%) also showing improvement. However, despite 25 of the 39 sectors being in positive territory, it’s a little early to claim victory – only last month, there was a 3.3% overall decline. For the record, the main drivers were food, clothing, and chemical manufacture.

As expected in Colombia’s consumer driven economy, there was another big retail sales (13.2%) increase driven by vehicles (+29.8%), information/technology (+56.6%), & food (+6%). This all reads well, except for the fact that scanning through the categories, so much is imported. With exports still in the doldrums, expect ongoing deficit problems.

Interestingly, the main economic press concentrated on industrial production which dropped 0.2% – no mention of the other data points – any wonder they get criticized by the government for misrepresenting the economy !

Whilst the diplomatic & trade dispute rumbles on with no fresh news, Donald Trump & Gustavo Petro find themselves continuing as strange bedfellows with Petro again this weekend, aiming at Banco de la República – Colombia and what he perceives as their stubbornness over rates, which remain at 9.25%. Trump has the same attitude toward the FOMC. Whilst 2025 has seen slower-than-expected growth in Colombia, the reality is that overnight rates should have come down far more in 2024, and allegations of politics at play are hard to ignore. This month we should see a reduction to 9%, from there hopefully we’ll see rates at or below 8.5% by the end of the year.

Over the past few weeks, there have been a growing number of headlines related to the growth in agriculture, record revenues, exports, etc., which was one of Petro’s stated aims when he came to office. Why is there so much surprise? Colombia has arguably the best growing climate in the world, and it is also a country where only 4 million of an estimated 32 million farmable hectares are in use, so there is huge upside potential. The fly in the ointment, of course, are the mega-rich robber barons who prefer to use their farms for their purebred horses and infinity pools, as opposed to contributing to the future of the country.

Those are the main points this Wednesday, but where we haven’t heard anything significant for the past week is pension reform, tax reform, referendums, decrees, or national assemblies. There has, of course, been plenty of hot air amongst the runners and riders in the 2026 presidential derby – but there is no need to give them airtime.

Have a great rest of the week.

Roops.

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Departamento Administrativo Nacional de Estadística – DANE Colombia office in Cúcuta. Photo credit: EEIM/Wikipedia.