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Colombia's central bank sees growth slowing in 1st quarter
April 5, 2013 / 7:47 PM / 4 years ago

Colombia's central bank sees growth slowing in 1st quarter

BOGOTA, April 5 (Reuters) - Colombia’s central bank expects economic growth to slow in the first quarter compared with the last few months of 2012, according to minutes of its last meeting published on Friday.

Policymakers cut the benchmark interest rate by a larger-than-expected half point in late March to revitalize the country’s sluggish economy and prevent low inflation falling further.

The economy grew 4 percent in full-year 2012, down from 6.6 percent in 2011. The government wants to foster economic growth this year to reach 4.8 percent.

“With respect to the economic situation for the first quarter of 2013, the information available points to the growth of the economy being lower than what was seen at the end of 2012,” the minutes said.

The economy expanded 3.1 percent in the fourth quarter.

The unanimous decision by the bank’s seven-member board took the benchmark interest rate to 3.25 percent, the lowest in Latin America. The surprise half-point reduction -- after four consecutive quarter-point cuts -- aimed to bolster growth after the economy was hit by lower overseas demand and anemic factory output.

With consumer price increases having decelerated in recent months, the cut was also aimed at bringing inflation to about 3 percent.

Low inflation is a concern for policymakers, as it may prompt consumers to hold off on purchases on expectations goods will become even cheaper, causing the economy to stall further. (Reporting by Eduardo Garcia; Editing by Leslie Adler)

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