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Scotiabank Says Activity Data Reinforces Call For Rate Stability

COLOMBIA
  • The ISE expanded by 3.0% y/y, slightly above the Bloomberg consensus of 2.8%, while in monthly seasonally adjusted terms economic activity contracted by 1.5%.
  • Underlying dynamics reflect that private demand is weakening, and it reinforces Scotiabank’s call for rate stability in April's monetary policy meeting.
  • All in all, Scotiabank are finding a picture of overall stability in headline inflation, a reduction in inflation expectations, and economic deceleration that are strong arguments for the central bank to pause the hiking cycle at the current 13.00% level.
  • For 2023, they project an expansion of 1.5% that would allow the central bank to start rate cuts in the final quarter of the year to close at 12.00%.

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