Colombia's economy could grow as much as 3.5 percent in the fourth quarter, leaving the full year with an expansion of about 3.2 percent, Finance Minister Mauricio Cardenas said on Friday. Cardenas told Caracol Radio that this expansion in gross domestic product would show the economy has "resistance" to the decline in oil revenue, with the fourth-quarter rise coming mainly from manufacturing and agriculture.
The expansion for the year would be slightly below Cardenas' official projection of 3.3 percent. A drop in oil prices has hit Latin America's fourth-largest economy, which is also struggling with an increase in inflation. Crude oil is Colombia's biggest export and leading source of foreign currency.
"It's a good result and demonstrates the economy has resistance and been able to handle the fall in oil prices," Cardenas said, estimating fourth-quarter growth at 3.4 percent to 3.5 percent. Colombia's economy grew 3.2 percent in the third quarter from a year earlier, the government said on Thursday, a better-than-expected figure that may prompt the central bank to raise its benchmark interest rate to counteract inflationary pressures.
The growth figure came in slightly above the central bank's forecast of 2.9 percent and probably leaves room for another hike in borrowing costs from the current 5.50 percent. Twelve-month inflation reached 6.39 percent in November. The measure has been above the high end of the central bank's 2 percent to 4 percent target range since February due to a precipitous fall in the peso currency in the past year and rising food prices as the El Ni?o weather phenomenon disrupts agriculture.