According to the report of the Bancolombia Research Group, the balance of consumption in the country during the first quarter of the year was negative in real terms, that is, eliminating the effect of inflation. There would have been a 10% decrease compared to the same period of the previous year.
This result reflects a process of slowdown in purchase levels, largely due to the complexities of the current economic context, including a level of inflation and rates that have not been seen in the country since the beginning of the 21st century.
In the report, Bancolombia also highlighted greater uncertainty due to an adverse international outlook, largely due to geopolitical tensions; among them the war in Russia and Ukraine, and the rise in rates at the FED. In the local situation, the higher levels of indebtedness had an effect and, therefore, the lower impulse on the part of households to increase consumption, a component that if reduced ends up slowing down GDP.
The results of the entity’s study are in line with the slowdown of the Colombian economy. According to the consumption index by income level in current legal minimum wages (Smlv), in March, people with the lowest income presented less moderation in their levels of consumption. On the contrary, the largest contractions occurred in the highest income, says Bancolombia.
A significant slowdown in consumption was found in the fashion and variety segments, which behave like elastic goods when faced with changes in demand. For this category, and for durable goods in general, there are a number of critical factors such as exchange rate volatility, rising interest rates, and lower consumer confidence. In the case of Colombia, there is an additional element: the elimination of the days of the days without VAT.
