Colombian economy backslides, contracting 10.6pc in August

BOGOTA: Colombia's economy contracted 10.6% in August compared to the same month a year earlier, as strict neighborhood coronavirus lockdowns in the country's capital slowed economic recovery, the government said on Monday.

The year-on-year fall in August was higher than the 9.7% contraction reported in July, the DANE national statistics agency said.

Nearly all economic activities were down in August, especially retail, construction, manufacturing and agriculture, but DANE attributed much of the fall to several neighborhood quarantines in Bogota.

Colombia staged a nationwide lockdown between March and August. Restrictions were gradually loosened but gross domestic product shrunk 8.1% between January and August, DANE said.

The government predicts GDP will contract 5.5% this year. The central bank is less optimistic, predicting a shrinkage between 6% and 10%.

The bank's board has cut 250 basis points from the benchmark interest rate since March, taking it to a historic low of 1.75%.