Colombian card spending means retail sales data will pick up – for now

While some Latin American economies struggle and others get stronger, it's a more mixed picture in Colombia.

Using a high-frequency dataset, CEIC users can get a real-time sense of consumers' waxing and waning confidence well ahead of the official figures – and insights into an economy that has been a bit more sluggish than expected in 2024.

The Big Data Card Consumption Index, which is calculated daily by the BBVA banking group and measures spending on payment cards, provides a useful early signal for official Colombian retail-sales data.

As our first chart shows, this led to a marked divergence between China and the ASEAN countries' trade balances with the US, starting in about 2019. While the US deficit with China remained near 2017 levels, its ASEAN trade deficit soared. This trend continued under President Biden.

For October, this card index surged 7.5% year-on-year, based on the 28-day moving average. This almost certainly means the official retail trade index for October will pick up when it is published on Dec. 16. (The official index had slowed sharply in September from August.)

The card index posted strong growth in November, too growing 5% year-on year. But a look at the daily trend line shows how that would have been considerably higher if not for a sharp decline at the end of the month. (This could reflect deferral of spending as consumers awaited "Black Friday" promotions; as of the time of publication, the card index was rebounding again.)

Our second chart goes deep into BBVA's card-use dataset, breaking down trends by sector. November saw notable spending growth in healthcare (16.9% year-on-year), restaurants (14.5%), and food (11%). Travel saw a pickup, too; hotel spending rose 8.6%. Entertainment spending showed the most negative outcome – dropping at a 14.5% pace.

What's the wider picture for the Colombian economy? As inflation moderated, the central bank turned more dovish in the second half of the year, cutting interest rates by 2 percentage points between June and November. However, those lower borrowing costs had yet to boost the economy in the third quarter: 2% year-on-year GDP growth missed expectations and also marked a slowdown from Q2.

As fixed investment in construction and machinery picks up, the IMF is optimistic about Colombia's prospects. It forecasts 1.6% growth for 2024, followed by 2.5%, 2.8%, and 3% in 2025, 2026, and 2027, respectively.

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