11 May 2015
Uncertain perspective for the Colombian economy – Scotiabank
FXStreet (Edinburgh) - In light of the recent minutes from the Colombian central bank, Eduardo Suarez, Chief FX Strategist at Scotiabank, noted the lack of clear direction of the Colombian economy in the near term.
Key Quotes
“Part of the board looks for growth to fall to about 3%, while others look for 3.5% (or even higher). One of the major arguments of the more bullish side, is that the weaker peso will likely drive a drop in imports, and fuel Colombia's exports”.
“One reason why we are skeptical, is that Colombia's trading are slowing, at the same time as Colombia is losing market share in its top markets (part of this is due to oil prices falling)”.
“Our sense is that the board's stance is in neutral territory, in a large part because there is still not enough clarity on what the performance of the Colombian economy will look like going forward: 1) what potential growth will be, 2) how sharp the deceleration in domestic demand will be, 3) how much of a rebound non‐commodity exports can see in the short / medium terms”.
Key Quotes
“Part of the board looks for growth to fall to about 3%, while others look for 3.5% (or even higher). One of the major arguments of the more bullish side, is that the weaker peso will likely drive a drop in imports, and fuel Colombia's exports”.
“One reason why we are skeptical, is that Colombia's trading are slowing, at the same time as Colombia is losing market share in its top markets (part of this is due to oil prices falling)”.
“Our sense is that the board's stance is in neutral territory, in a large part because there is still not enough clarity on what the performance of the Colombian economy will look like going forward: 1) what potential growth will be, 2) how sharp the deceleration in domestic demand will be, 3) how much of a rebound non‐commodity exports can see in the short / medium terms”.