LatinNews Daily - 05 September 2023

In brief: Colombia’s gov’t and industry urge drop in interest rates

* Colombia’s leftist government led by President Gustavo Petro, Colombia’s private sector organisation Asociación Nacional de Empresarios de Colombia (Andi), and banking association (Asobancaria) have issued a joint statement urging the central bank (Banrep) to lower interest rates to shore up the economy. The statement cites recent inflation figures which suggest that the country will close 2023 with single digit inflation. Annual inflation in July was running at 11.78%, down from 12.13% in June. Banrep has held its benchmark interest rate stable at 13.25% at its last two rate meetings – most recently raising it in April to deal with inflation. The call to revive the economy come as Colombia’s GDP contracted by 1.0% in the second quarter of 2023 compared with the previous quarter. In year-on-year terms, GDP in Q2 was up by 0.3%, while GDP growth in the first half of 2023 was up by 1.7% compared with the same period last year. This led Finance Minister Ricardo Bonilla at the time to say that the figures show how “the economic slowdown is consolidating”.

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