BOGOTA, Sept 16 (Reuters) - Colombia’s central bank said it is “very likely” that the economy will end the year with growth below its 2.3 percent projection, the minutes of last month’s policy meeting showed on Friday.
The central bank held its benchmark interest rate steady at 7.75 percent on Aug. 31, the first time in a year, as the board grappled with a sluggish economy and fast-climbing consumer prices that have put their 2017 inflation target at risk.
The minutes said that while third-quarter economic data remains scarce, output of coffee, oil and energy was weak in July compared with the previous year and consumer confidence and trade perceptions indicate an easing of growth.
“That, together with second quarter GDP data, suggests that it’s very likely that full-year economic growth comes in below,” the minutes said.
The bank’s decision to give breathing room to the economy came after second-quarter gross domestic product grew a slower-than-expected 2 percent annually, a seven-year-low.
Finance Minister Mauricio Cardenas revised his 2016 growth estimate downward to 2.5 percent from 3 percent following the disappointing second-quarter GDP data, while the bank maintained its forecast of 2.3 percent.
The board voted six-to-one to hold the rate last month, with one member calling for another quarter-point hike on top of the 325 basis points already raised.
One member, who formed part of the majority decision, said that if the economy shows a bigger slowdown in growth the bank should “think of an eventual reduction in the interest rate.” (Reporting by Nelson Bocanegra and Helen Murphy; Editing by Meredith Mazzilli)