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BOGOTA, Feb 28 (Reuters) - Colombia’s economy expanded less than expected in the fourth quarter of 2018, the government’s DANE statistics agency said on Thursday, in line with market forecasts for the full year as months of central bank interest rate cuts began to take effect.
Gross domestic product grew 2.8 percent during the quarter, better than the 1.3 percent growth in the same three-month period of 2017 but less than the 3 percent predicted by the market. The economy grew 0.6 percent from the third quarter, DANE said.
Annual growth of 2.7 percent last year was similar to the 2.67 percent expected by the market. The government revised down its 2017 GDP growth figure down to 1.4 percent from 1.8 percent.
“You have to keep in mind that there are adjustments in the previous figures, which sort of puts the brakes on optimism about how good the figure for 2018 was,” said Camilo Perez, head economist at Banco de Bogota.
“The growth rate remains modest,” he added.
Growth was driven by professional, scientific and technical activities, which rose 5 percent, followed by public administration, defense, education and health, up 4.1 percent, and information and communication, up 3.1 percent.
The central bank has maintained the benchmark interest rate at 4.25 percent for 10 months in a bid to keep consumers spending while trying to keep inflation from creeping higher.
Given the slow improvement in the economy for this year and next, analysts expect the benchmark rate to be raised to 4.75 percent by the end of 2019, a Reuters poll showed last week.
The economy is expected to grow more quickly this year than in 2018, at about 3.2 percent, below the government’s 3.6 percent goal. (Reporting by Julia Symmes Cobb and Helen Murphy Editing by Chizu Nomiyama, James Dalgleish and Dan Grebler)