- Colombia: Citi Survey—Inflation expectations increased and analysts expect a 25bps rate cut in March
- Peru: Mining investment steadied in 2024, but production remained mostly positive
COLOMBIA: CITI SURVEY—INFLATION EXPECTATIONS INCREASED AND ANALYSTS EXPECT A 25BPS RATE CUT IN MARCH
The Citi Survey for February was published on Monday, February 24th. BanRep uses this survey as one of its indicators for inflation expectations, the monetary policy rate, GDP, and COP.
Key points included:
- Economic growth projections for 2025 and 2026 had no significant changes. 2024 closed with economic growth of 1.7%, below the 1.8% estimated in the January survey. For 2025, the average expectation is 2.61% (2 basis points higher than the previous survey). Meanwhile, for 2026, economic growth of 2.94% is expected (2 basis points lower than the previous survey), which assumes that the Colombian economy would maintain growth below its potential for the following 2 years.
- Inflation expectations were adjusted upwards for 2025, while for 2026 the change was not significant. In the first inflation reading of 2025, the impact of a high increase in wages was evident, showing a slight increase in inflation from 5.20% to 5.22%. For February, the average of respondents expects inflation to be 1.02% m/m, which would leave annual inflation at 5.14%. For the end of 2025, the expectation increased by 20bps compared to the previous survey, standing at 4.28% y/y, lower than the 4.35% contemplated in the BanRep expectations survey. For 2026, the expectation stood at 3.54% (2 basis points lower than the previous survey). Scotiabank Colpatria estimates that February inflation will be 1.10% m/m and 5.23% y/y, while by the end of 2025 and 2026 it is estimated to reach 4.86% y/y and 3.68% y/y, respectively.
- Most respondents expect a rate cut at the March 31st meeting. According to the survey, 20 of the 23 respondents expect a rate cut of 25bps to 9.25%, including the Scotiabank Colpatria team. Two analysts expect a rate pause at 9.50%, while one expects a 50bps cut to 9%. Expectations for the end of 2025 are concentrated at 7.75% (chart 1), and the range is between 7% and 8.25%. For 2025, the distribution is slightly more dispersed, with a median of 6.50% and a range between 6% and 7.50%. Scotiabank Colpatria expects the monetary policy rate to be 7.75% at the end of 2025 and 6.50% in 2026.
- Finally, the consensus of economists expects the exchange rate to be 4,161 pesos in February. By the end of 2025, the average forecast is that the exchange rate will be 4,291 pesos and 4,214 pesos in 2026. Scotiabank Colpatria estimates an exchange rate of 4,367 pesos for 2025 and 4,364 for 2026.
—Daniela Silva
PERU: MINING INVESTMENT STEADIED IN 2024, BUT PRODUCTION REMAINED MOSTLY POSITIVE
Mining investment remained nearly unchanged in 2024, totaling US $4.96 billion—just a hair above the US $4.93 billion invested in 2023 (+0.5%) (chart 2). This figure was very close to our forecast of US $5 billion. The flat trend was mainly due to having only one greenfield project in the portfolio and only two brownfield projects had begun construction.
The biggest investments came from Antamina (+9.7%), driven by its ongoing Antamina Replacement project; Las Bambas (+59.8%), thanks to its Chalcobamba project; and Cerro Verde (+19.7%), due to increased expected Capex investments. Meanwhile, Anglo American’s investment continued to decline, dropping 38.9% y/y (table 1).
Looking ahead to 2025, we estimate 5.0% growth in mining investment, reaching about US $5.2 billion. The portfolio includes only one greenfield project under construction—San Gabriel—expected to be completed this year. In addition, there are two brownfield projects: Inmaculada Replacement and Antamina Replacement. There are other brownfield projects in the pipeline but are waiting for approval of their EIA permits.
Mining output in 2024 showed largely positive results. Gold production grew by 6.9% y/y, driven by a significant 28.6% increase at Yanacocha, where injection leaching techniques improved metal recoveries, along with higher grades at Quecher Main. Minera Boroo grew a notable 33.3% y/y due to optimized leaching processes, and Poderosa’s production rose 8.5% y/y thanks to higher ore grades. These companies together produce 25% of total gold output. Silver production increased by 15.4% y/y, mainly driven by Buenaventura’s remarkable 265% boost following Yumpag’s first full year of operation. Additionally, production of lead, iron, and molybdenum grew by 6.6%, 23.2%, and 25.3%, respectively (table 2).
On the flip side, copper production dipped slightly by 0.7% in 2024, due to the lack of new projects. Zinc output also fell by 13.5%, largely because Antamina mined areas with lower grades.
—Katherine Salazar
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