Industrial Production Down, But Inflation Concerns Predominate

Colombian industrial production fell by 4.0% y-o-y in May 2008, a 4.3% y-o-y decline when excluding coffee processing. The decline was largely thanks to a 36% y-o-y contraction in vehicle and engine manufacturing, and is in line with our forecast of a real GDP growth slowdown in 2008 to 5.1%, from 7.5% in 2007. May also witnessed a 0.4% y-o-y drop in retail sales, continuing the downward trend which has been in play since Q107.

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