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Country Insights: Colombia highlights
Before the new millennium, Colombia was portrayed in the international media as a disintegrating nation torn apart by guerrillas and drug traffickers. But in just a decade, Colombia has transformed itself into one of the fastest-growing countries in Latin America.
Many economists expect this growth to continue. The challenges that remain are typical of many rapid-growth economies: they involve logistics and strategic choices, not survival.
As befits a country at the heart of Latin America, Colombia has learned from the region’s
other leading economies. From Mexico, Colombia has grasped the value of free trade agreements. From Brazil, Colombia has gained a sense of how a government can use its influence to foster commerce. No wonder Christine Lagarde, Director of the International Monetary Fund, described Colombia’s macroeconomic situation as “positive and promising” after her visit to the country in December 2012.
Given Colombia’s low inflation, conservative economic policies and thoughtful management, Lagarde and other observers are finding a lot to like about the country these days. So are investors: foreign investment in Colombia continues to grow as the world rediscovers a country that many global businesses once write off. What once looked like the middle of nowhere now looks like the middle of everything. Colombia offers not only a stable economy but also geographic proximity to both Latin America and the US.
Even as more direct investment arrives in Colombia, more Colombian companies are starting to look abroad for new sources of business. Although the Colombian economy is still skewed heavily toward commodity exports, businesses are rapidly diversifying as their confidence and experience grows.
Fast facts: Colombia
- Poverty is now 34.1%, down from 45% in 2005, and per capita income stands at US$9,560 in purchase power parity terms, up from US$7,030 in 2005. (World Development Indicators, World Bank)
- Inflation is running at just 1.9%, according to a March 2013 report by the country’s central bank.
- Colombia’s public debt ratio declined from 36.9 to 34.2% of GDP between 2010 and 2011. (World Bank Country Overview)
- In 2000, the ratio of investment to GDP stood at 9%. Today, it’s 28%. “That’s a sign of great strength,” says Mauricio Santa Maria Salamanca, Colombia’s National Planning Director. (“Agricultural revival ahead,” El Tiempo, 22 March 2013)
- The 4% rise in economic growth in 2012 exceeded the most optimistic projections of 2011 – even the Government’s, according to Portafolio.co, a Colombian finance publication. (“Colombian economy achieved a growth of 4% in 2012,” Portafolio.co, 25 March 2013) However, this follows a high of 6.6% growth in 2011, and only 3.1% in the fourth quarter of 2012.
For more information
|Download the Colombia highlights report here.|