UPDATE 1-Colombia's Q1 economic growth hit 8.5%, beating expectations

(Adds details, quotes)

BOGOTA, May 16 (Reuters) - Colombia’s economy grew 8.5% in the first quarter of 2022 compared with the year-earlier period, the government said on Monday, though analysts have warned inflationary pressures could temper growth later in the year.

The result was above median predictions in a Reuters poll last week, which forecast the Andean country’s gross domestic product (GDP) would grow by 7.5%.

“This is a good start to the year, thanks to the reopening and the lagged effect of solid fiscal and monetary support, which offset an array of headwinds, including high inflation and the effect of the sell-off of the Colombian peso. But momentum is already easing on a sequential basis,” said Andres Abadia, chief LatAm economist at Pantheon Macroeconomics.

“This could motivate the central bank to tighten monetary policy faster,” Abadia added.

The economy grew 8.2% and 9.0% in January and February respectively, before expanding by 7.6% in March.

Colombia’s arts sector saw first-quarter economic growth of 35.7% compared with the same quarter a year earlier, while the information and communication sector expanded by 20.6%.

Both commerce and manufacturing expanded in the first quarter of 2022, growing by 15.3% and 11.1% respectively.

Contractions were registered in the agricultural and financial sectors, which shrank 2.5% and 3.2% versus the year-earlier period.

Colombia’s economy expanded by 1% in the first three months of the year.

The statistics agency also revised Colombia’s 2021 economic growth up to 10.7%. It previously said the Andean country’s economy had grown 10.6% last year.

Colombia’s central bank expects Latin America’s fourth-largest economy to expand 5% this year. The bank raised its growth outlook for the year from 4.7% at its meeting last month.

The board began raising the benchmark interest rate in September 2021, taking it 425 basis points higher by late last month, to 6%, in a bid to tamp down spiking inflation as economic expansion moderates. (Reporting by Carlos Vargas and Nelson Bocanegra Writing by Oliver Griffin Editing by Jonathan Oatis)