By Carlos Vargas and Luis Jaime Acosta
BOGOTA (Reuters) -Colombia’s economy grew 7% in the third quarter compared to a year earlier, the government’s DANE statistics agency said on Tuesday, driven by growth in the entertainment sector, as well as in information and communication, pushing the metric above market expectations of 6.7%.
In a Reuters poll last week, analysts said they expected growth in Latin America’s fourth-largest economy to slow amid moderating domestic consumption, rampant inflation and rising interest rates.
The economy grew 1.6% in the third quarter versus the second quarter, DANE said.
Growth between July and September was driven by the arts, entertainment and recreation sector, which expanded 36.9%, information and communication, which grew 14%, and construction, which registered growth of 13.4%.
The finance sector registered 9.2% growth in the third quarter compared to the same period a year earlier, while retail expanded by 8.1%. Mining grew by 2.5%, while agriculture, the only sector to contract, shrunk by 1.4%.
“It’s favorable. The economy has kept up its solid performance,” said Camilo Perez, director of economic investigations at the Banco de Bogota bank, adding that while 2022 was looking strong, more recent trends suggested moderation.
“Internal demand remains the main driver of growth,” Perez said.
DANE revised its GDP growth for July and August upward to 6.7% and 9% respectively. In September the economy grew by 4.2%.
The government of President Gustavo Petro this month won congressional approval for a tax reform set to raise 20 trillion pesos ($4.16 billion) annually for the next four years, to fund social programs and tackle inequality.
The technical team of the country’s central bank forecasts GDP growth for this year at 7.9% and 0.5% for 2023.
The bank’s board has raised the benchmark interest rate to 11% – its highest level in 21 years – in continued efforts to respond to rising inflation.
Twelve-month consumer price growth hit 12.22% in October.
($1 = 4,806.07 Colombian pesos)