Colombia’s economy grew at its fastest pace in nine months in November, beating all forecasts and calming fears of a recession, Bloomberg News reported. The ISE economic activity index, a proxy for gross domestic product, rose 2.3% from a year earlier, the statistics agency reported Thursday. That was its first expansion in four months, and exceeded all 15 forecasts of economists surveyed by Bloomberg. Agriculture, oil and mining, government services and the financial sector led the expansion, while manufacturing and construction contracted.
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Colombia President Gustavo Petro has proposed lowering the country’s corporate tax rate and increasing income taxes for its highest earners, Bloomberg News reported. The move, which he has not yet detailed, would allow companies to grow and make the tax system more just, he said in a post on X on Saturday. Petro also spoke in broad terms about the tax reform proposal in remarks broadcast Friday after he announced that the government will increase the minimum wage by 12% next year.
Colombia delivered its first interest rate cut in three years, lowering borrowing costs by 25 basis points as signs of a faltering economy overtake inflation concerns, Bloomberg News reported. The central bank reduced its benchmark rate to 13%, Governor Leonardo Villar told reporters in Bogota after Tuesday’s policy meeting. The decision was backed by five of the bank’s seven board members, with two voting to keep the rate at 13.25%. Twelve of 22 economists surveyed by Bloomberg correctly forecast the move, while the rest expected interest rates to remain unchanged.
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Colombia’s central bank could put its credibility at risk if it rushed to cut interest rates prematurely, according to its newest board member, Bloomberg News reported. “There’s a big risk in easing early then having to reverse course,” co-director Olga Lucia Acosta said Tuesday, in her first interview since she was appointed by President Gustavo Petro last year. Brazil, Peru and Chile are all easing monetary policy as inflation cools across Latin America.
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Prosecutors in Colombia on Thursday announced criminal indictments against 60 people, including dozens of former government officials, on graft charges tied to the transnational corruption scandal involving disgraced Brazilian contractor Odebrecht, the Wall Street Journal reported. The charges represent more fallout from the extensive bribery network that Odebrecht in 2016 admitted to creating in a dozen countries, from Latin America to Africa, to bribe politicians and government officials for lucrative infrastructure contracts.
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Colombia’s government is betting that its proposed public pension fund would reinvigorate investment flows in the local bond and equity markets, according to a top Finance Ministry official, Bloomberg News reported. The fund could be used to stimulate local markets while also facilitating access to long-term capital, José Roberto Acosta, the Finance Ministry’s Public Credit Director, said during an event at Bloomberg’s Bogotá office. “The Finance Ministry is concerned because the equity market is nonexistent, and the corporate bond market has also been dry for a long time,” Acosta said.
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Colombia held interest rates at a 24-year high on Monday to curb inflation that far exceeds that of regional peers, Bloomberg News reported. The central bank kept its benchmark rate at 13.25% for a second straight month, in line with expectations. The decision was unanimous, bank Governor Leonardo Villar told reporters in Bogota. Colombia was the last of Latin America’s major economies to end record monetary tightening, and is now forecast to be among the last to start easing policy. Chile on Friday became the first, with a bigger-than-expected rate cut of one percentage point.
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The spectre of rising corporate debt defaults exacerbating a global economic slowdown has for months been largely brushed aside by resilient credit markets, Reuters reported. Now, long-feared corporate debt woes are starting to hit home, while more companies are being downgraded to a junk credit rating — facing higher borrowing costs as a result. Retailer Casino, with 6.4 billion euros ($7.19 billion) of net debt, is in court-backed talks with creditors; Britain's Thames Water is in the headlines with its 14 billion pound ($18.32 billion) debt pile.
Colombian flag carrier Avianca has overhauled the interiors of more than 100 Airbus A320 jets, increasing their capacity by a fifth as it repositions itself as a budget airline following its bankruptcy, Business Traveler reported. Bogotá-headquartered Avianca filed for chapter 11 bankruptcy in New York in the spring of 2020 amid the upheaval and travel restrictions of the coronavirus pandemic. As part of its post-bankruptcy restructuring, Avianca has adopted a new business model, transforming itself from a full-service legacy airline to a low-cost carrier.
Billionaire banker Jaime Gilinski ramped up his bid to take control of Colombian grocery store chain Almacenes Exito, according to a draft letter seen by Bloomberg and later confirmed in a regulatory filing, Bloomberg reported. Gilinski on Tuesday sent the letter to Exito’s largest shareholder, Cia Brasileira de Distribuição, offering $586.5 million in cash for a 51% stake in the retailer, GPA said. It represents a per-share premium of more than 30% from the original offer, which was made last month for 96.5% of Exito and rejected by GPA’s board.