Colombia | Private consumption moderated further in February

Summary

In February, total consumer spending contracted 2.7% year-on-year in real terms, deepening the moderation it has been showing since the end of 2022. This time, the result was mostly explained by the deceleration of spending in services sectors.

Key points

• Key points:
• The BBVA Big Data Consumption Tracker built by BBVA Research allows to follow in real time the spending of Colombian households through the traceability of credit and debit card transactions at the bank.
• Spending on goods has had a contractionary annual rate since August 2022 and stood at -8.7% in February. Spending on services contracted by 3.5% year-on-year. The latter, for the first time since the pandemic crisis, fell in real annual terms, dragging total spending into negative numbers as well.
• There was a moderation in spending on restaurants, hotels and airlines, among services; and on clothing, among goods. On the other hand, spending on entertainment and transportation rebounded during the month. Both the variation in online spending and the physical channel presented setbacks in February; however, the former remained more resilient than the latter. In addition, spending was contained in most major cities, with the exception of Cartagena and Pereira.
• The results obtained correspond to the expected and desired dynamics for consumption in 2023: interest rate increases by Banco de la República, which seek to reduce inflation and encourage household savings, will lead households to make fewer spending and debt decisions this year, reducing the imbalances in the economy.

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