Despite a 5.76% growth in Colombian household spending during September 2024, the report presented by Raddar highlights that the economic reactivation remains fragile and unequal. In real terms, annual growth was just -0.04%, accumulating seven months of adjustment since the beginning of the year and 23 months of contraction since November 2022.
The slight improvement in consumption has been driven by the slowdown in inflation, especially in food and durable goods. However, the labor market has shown limited growth in job creation, which has increased unemployment levels, mainly affecting low- and middle-income households. These segments allocate a greater part of their budget to covering basic needs, which limits their ability to recover from the increase in prices of essential goods.
You can read: Construction sector in Colombia reports significant falls
In contrast, high-income households have shown a rebound in their spending, supported by a more favorable economic environment, such as lower interest rates and relatively stable formal employment. This has allowed them to increase their consumption of non-essential goods and services, generating positive dynamism in this segment, unlike the most vulnerable households.
The recovery in spending continues to be uneven between different social strata, and although inflation has given a respite in certain sectors, such as food, consumption still remains below historical levels. According to Raddar, the upcoming holiday seasons could mark a key point in the year’s close, but caution and economic fragility persist.
In short, while some households are beginning to show signs of recovery, spending in Colombia remains fragile, especially among the most vulnerable sectors, underscoring the differences in economic recovery between different income groups.
You can read: Natural gas rationing announced: Measures and details