BOGOTA (Reuters) - Colombia’s economy will have suffered the worst contraction in its history in the second quarter because of fall-out from a coronavirus quarantine, analysts said in Reuters poll on Thursday.
Meanwhile inflation will continue well below the long-term target rate of 3% amid low consumer consumption.
The Andean country’ gross domestic product will have contracted a median of 16% between April and June compared to the same period last year, predictions by 18 analysts showed.
Analyst contraction estimates were between 8% and 18.6%. The government statistics agency will publish second-quarter GDP figures on Aug. 14.
“Clearly it will be the worst registered in history, the worst-hit sectors are those which had the most closures, like retail, recreation, services provided directly to the public,” said Camilo Perez, head of economic studies at Banco de Bogota.
“But it’s clear the impact is generalized. It’s not just a brake on supply but on demand, and it’s a very complicated collision,” he added.
Colombia has been in a national lockdown since late March. Though some sectors and regions are gradually reopening, the quarantine is set to last until Aug. 30.
Analysts said the economy will contract 5.95% this year, more than the 5.5% projected by the government. Growth will reach 4.35% next year, those polled said.
Inflation estimates for this year were down drastically to 1.8%, from a 2.21% estimate in last month’s survey, because of low domestic consumption.
If inflation falls that precipitously, it would be the lowest price growth figure for 65 years.
“The figures confirm the deflationary effects of some of the measures adopted under the terms of the (government’s) economic emergency have been stronger than anticipated,” said analyst Julio Romero of Corficolombiana.
In July alone, consumer prices will fall 0.17%, taking the 12-month figure to 1.8%, analysts said.
Reporting by Nelson Bocanegra; Writing by Julia Symmes Cobb; Editing by Lisa Shumaker