In the first two months of 2018, the national activity index climbed back to its highest level since August 2017. In February, it registered its sixth consecutive y/y acceleration. And although it was stable as compared to January, it points to a cyclical improvement, for two reasons. First, the impact of the VAT hike in early 2017 has begun fading away, with improvements in consumer confidence as well as y/y retail sales in January (+5.2%) and February (+6.3%). The central bank’s monetary easing (9 rate cuts since December 2016 as inflationary pressures abated) has supported the recovery of credit. Another cut is expected on Friday. Second, the trade balance has improved for the sixth consecutive month, to -USD8.8bn, back close to end-2014 levels. Higher oil prices have boosted exports as oil and related products account for a third of Colombia’s exports. The future of investment growth (back to positive territory since Q2 2017) will depend on the outcome of the presidential election next month.