Weekly Report - 27 September 2007 (INNS 1741-7422)

COLOMBIA | Strong growth. The economy grew by 7.59% in the first half of the year, driven by construction (15.98%); industry (13.3%); trade (11.22%) and transport (11.2%), according to the official statistics agency, Dane. Growth in the second quarter was 6.87%, of which financial services provided 2.48 points. Construction, however, slowed down in the second quarter, expanding by only 6.19%. Despite the impressive growth figure, the finance minister, Oscar Iván Zuluaga, said that the government would maintain its growth estimate of 5.8% for the year. He said that the financial hiccup in the US could impact growth more than initially thought. It will also be affected by the high base of comparison of the fourth quarter of 2006, when there was growth of 8.42%. The central bank kept interest rates unchanged at 9.25% suggesting that its measures in May to restrict foreign capital inflows, rein in public spending and control inflation met with some success.

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