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Scotiabank Expecting Another 50BP BanRep Cut in June

COLOMBIA
  • Despite the economic weakness reflected in yesterday’s production and retail sales data, Scotiabank believe the central bank will not accelerate monetary policy easing and their economists forecast a 50bp cut at the June 28 meeting.
  • BanRep’s GDP expectations for Q1-2024 are at 0.3% y/y, which is compatible with a weak March result and therefore Scotiabank don’t think yesterday’s data surprised BanRep’s board, which is likely to wait for more evidence before considering accelerating cuts.
  • On today’s GDP release, Scotiabank think the data should be taken with a grain of salt considering calendar effects (Easter timing) and other idiosyncratic matters. They expect an expansion of around 1.1% in Q1-2024. For 2024, the forecast is for 1.4% growth, indicating a gradual recovery, although still below potential.

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