Stabilized oil production and net exports to support Colombian growth

Although Colombia's industrial production fell 3.9% in May, activity data are giving mixed signals, much more than expected by the consensus (-2.2%), consumer confidence surprised to the upside, growing by 2.7%. 

Despite this rebound in retail sales, the trend continues to suggest a consumption slowdown. 

Still, net exports could be partly offsetting the deceleration of domestic demand. 

While the depreciation of the currency is starting to lead to a contraction in imports, the stabilization of oil production in recent months, at around 1.03mn b/d, and a relatively low base in the same period of last year, would imply a production increase of approximately 6.0% y/y, which should support export growth. 

"In the second half of the year, there should also be some support from the supply side with the re-initiation of operations of Cartagena refinery. This continues to support the forecast at a rate of growth in Q2 similar to that of Q1 (2.8%) and 2.7% for the year", says Barclays.