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Scotiabank Expecting Easing To Commence In December

COLOMBIA
  • Scotiabank have noted that in terms of annual growth, August continued to be driven by primary and tertiary (services) activities, which recorded positive annual variations of 1.2% and 1.7%, respectively. In contrast to the growth of these two sectors, secondary activities (manufacturing and construction) continued to decline, reaching -7.0% Y/y in August.
  • Yesterday’s mixed economic results will not significantly affect market expectations for the October BanRep decision.
  • September’s inflation data maintains a bias towards a later start of the central bank’s easing cycle, possibly starting in December or even in the first quarter of 2024, as shown in BanRep’s latest expectations survey.
  • At Scotiabank Economics Colombia, the official call for a rate cut starts in December and largely depends on a stronger correction in inflation combined with new signs of significant economic deterioration. The alternative scenario is for the easing cycle to begin in the first quarter of 2024.

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