(Bloomberg) – Chairman Gustavo Petro lashed out at Colombia’s central bank on Wednesday evening, saying the country’s weak economic growth is due to restrictive interest rates that are dampening domestic demand.
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His comments follow a government report published earlier in the day that showed output in the first quarter fell short of economists’ expectations, while economic activity posted its worst performance in more than three years in March.
The situation would be even more dire without the government’s countercyclical fiscal policy, the leftist leader said in a post on his X account, which has prevented the Andean country from falling into an economic recession.
“While interest rates are strangling the Colombian economy, my government’s countercyclical action is keeping it afloat,” Petro said. “The red figures in the private sector are determined by the decline in housing construction, which drags down industrial products for construction.”
Gross domestic product grew by 1.1% in the first three months of the year from the previous quarter – just over half the average estimate of economists polled by Bloomberg – while March’s GDP indicator rose by 1. 5% decreased.
Read more: Colombia’s GDP lags behind forecasts, calling for faster easing
Petro and his Finance Minister Ricardo Bonilla have made repeated calls for the central bank to accelerate the cut in key interest rates, which are the highest among Latin American inflation-targeted economies.
Since December, policymakers have decided in a divided vote to cut borrowing costs by 150 basis points to 11.75%.
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