Colombia's economy grew 10.6% in 2021 - government

Credit: REUTERS/Jose Gomez

By Nelson Bocanegra and Carlos Vargas

BOGOTA, Feb 15 (Reuters) - Colombia's economy grew 10.6% last year, the government statistics agency said on Tuesday, handily beating market expectations of 10% as the entertainment, retail and manufacturing sectors soared.

Analysts said in a Reuters poll last week the expansion of the Andean country's gross domestic product (GDP) would be led by household consumption, hearty fiscal spending and low interest rates. The government had predicted growth of above 10.2%.

The economy expanded 10.8% in the fourth quarter compared to the same period in 2020, the DANE agency said, also higher than analyst expectations, which came in at 8.7%.

The full-year expansion figure was partially thanks to a weak comparative period in 2020, amid the worst of the COVID-19 pandemic.

Colombia's GDP was equivalent last year to some $298.7 billion.

DANE revised last year's economic contraction to 7%, from an initially reported 6.8%. The agency also revised the economic growth reported for 2019 to 3.2%, from 3.3% previously.

Growth was driven last year by entertainment and recreation, which grew 33%, retail, which expanded 21.2% and manufacturing, which increased 16.4%.

The figure was the highest growth figure since 1975, DANE director Juan Daniel Oviedo said.

The mining, agriculture, real estate sectors expanded just 0.4%, 2.4% and 2.6%.

Expansion in the fourth quarter was also led by the entertainment and recreation and retail sectors, which expanded by 31.6% and 21.2% and communications, which grew by 18.1%, DANE said.

The economy grew by 4.3% compared with the third quarter of 2021, DANE added.

Colombia's central bank board raised the benchmark interest rate by 100 basis points to 4% in January, the biggest monthly increase in decades as it tries to counter inflationary pressures.

The board was divided on how sharply to increase the rate, with five policymakers backing the 100-basis point-increase and the remaining two voting for a 75-basis-point hike, but the sharp rise keeps Colombia in line with regional central banks around the region, which have been hiking on inflation concerns.

($1 = 3,938.97 Colombian pesos)

(Reporting by Nelson Bocanegra and Carlos Vargas; Writing by Julia Symmes Cobb and Oliver Griffin; Editing by Andrea Ricci)

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