Venezuelan diaspora supercharging Colombian economy, boosting growth to its fastest rate

The economy of Columbia grew at its fastest pace since 2015 as migration from Venezuela and accelerating credit growth boost consumer demand.

GDP expanded 3.3 per cent in the three months through September, compared to the same period a year ago, the statistics agency said Thursday.

As the economy outpaces peers this year, Columbia has held out against the emerging market trend for interest rate cuts.

Faster than Peru, Chile, Brazil, Mexico and Argentina Columbia will grow 3.4% in 2019 according to the International Monetary Fund's forecasts.

Around 1.5 million migrants have received Colombia from Venezuela in the last few years; thousands more arrive every day. This may help explain why Colombia has an unusual combination of too strong growth and a weak labour market.

"Migration probably explains Colombia's relatively strong consumer demand," said Economists from Banco de Bogota and Banco Bilbao Vizcaya Argentaria.

Colombia has received an extreme migration shock. While the migrants are impoverished, but they are consuming.

Household consumption is what is explaining Colombia's growth.

The retail, wholesale and transport sector expanded by 5.9% while financial services grew 8.2%. This helped offset the weak manufacturing and oil industries, and a contraction in construction activity.