Colòmbia flag Colòmbia: Visió econòmica i política

El context econòmic de Colòmbia

Economic Indicators

For the latest updates on the key economic responses from governments to address the economic impact of the COVID-19 pandemic, please consult the IMF's policy tracking platform Policy Responses to COVID-19.

Thanks to its market size, the extent of its natural resources (coffee, emeralds, oil and coal, among others) and a historical reputation as an exemplary debtor, Colombia has experienced a stable and solid growth for most of the past two decades. Although the country was affected by the fall in oil prices due to the pandemic in 2020, Colombia was able to recover in 2021, with GDP growth reaching an estimated 7.6% mainly due to a boost in petroleum exports and increased household consumption - which should continue to drive the economy in the coming years, supported by the ongoing recovery on the job market and the continuous implementation of fiscal support programs targeting low-income households. According to the IMF, GDP growth is expected to decrease to 3.8% in 2022 and 3.3% in 2023.

Colombia's account deficit widened to 4.4% of GDP in 2021, due to a higher trade deficit, compounded by rising freight costs and repatriated income from foreign investors. Additionally, the country's rebound in household consumption boosted imports, which exceeded the rise in exports despite higher agriculture and energy commodity prices, and contributed to Colombia's account deficit. The government balance was equal to -7.5% of the GDP in 2021, and the deficit should continue in the coming years, reaching -6.2% in 2022 and -4.4% in 2023. Inflation increased slightly in 2021, reaching 3.2%, and it should remain relatively stable at 3.5% in 2022 and 3% in 2023. Colombia’s public deficit remains a source of concern for the government and for investors. The decrease of FDI entering Colombia during the early stages of the pandemic led the government to finance itself through loans from multilateral banks which brought government debt to 66.7% of the GDP in 2021. Looking ahead, gross debt is expected to slightly increase to 67.6% in 2022 and 69.7% in 2023. In order to face the COVID-19 crisis and to help the Colombian population and companies, the government put in place a sizable fiscal package for 2020 and 2021, to strengthen the health system’s capacity to manage the pandemic and limit the economic and social fallout of the crisis. Overall, Colombia's fiscal measures to mitigate the pandemic have been effective in boosting economic activity, which has been gradually recovering.

One third of the Colombian population lives below the poverty line. Development policies for rural areas are a priority for the Colombian government. Unemployment rates, which increased in 2020 due to the outbreak of the pandemic, declined to 14.5% in 2021, and it should continue decreasing in the coming years. However, unemployment rates are not expected to go back to pre-pandemic levels in the short term. It should be noted, though, that more than half of the Colombian population continues to work in the informal sector. Overall, inequalities are strong throughout the country: Colombia has a Gini coefficient of 50.4, one of the highest in Latin America. Corruption and security remain as major concerns for individuals and businesses.

 
Main Indicators 201920202021 (e)2022 (e)2023 (e)
GDP (billions USD) 323.38271.55e300.79319.29336.25
GDP (Constant Prices, Annual % Change) 3.3-6.87.63.83.3
GDP per Capita (USD) 6,5475,3915,8926,1876,447
General Government Balance (in % of GDP) -1.8-4.7-7.5-6.2-4.4
General Government Gross Debt (in % of GDP) 52.365.4e66.767.669.7
Inflation Rate (%) 3.52.53.57.74.2
Unemployment Rate (% of the Labour Force) 10.516.114.513.813.1
Current Account (billions USD) -14.51-9.33e-13.17-12.87-13.38
Current Account (in % of GDP) -4.5-3.4e-4.4-4.0-4.0

Source: IMF – World Economic Outlook Database, October 2021

Note: (e) Estimated Data

Main Sectors of Industry

Natural resources are abundant in Colombia. The country has largest coal reserves in Latin America, and has the second largest hydroelectric potential in the continent, after Brazil. Colombia also has significant amounts of nickel, gold, silver, platinum, and emeralds, as well as large petroleum and natural gas reserves. Due to the climate and the topography of the country, agriculture is extensive and very diversified. Colombia's main crops are coffee, bananas, cut flowers, sugarcane, livestock, rice and corn. The share of agriculture in GDP has been falling consistently for over 50 years, as both industry and services have expanded, and it currently represents 7.6% of the GDP. However, agriculture remains an important source of employment in the country, as it employs 15.7% of the workforce. Despite the negative impacts of the pandemic, Colombian agriculture experienced the most growth of any sector in 2020, and continued growing in 2021, along with the livestock sector.

Colombia is the most industrially diverse country of the Andean Community, with four major industrial centres: Bogota, Medellin, Cali, and Barranquilla. Most industries in the country are driven by agriculture and commodities, with the main industries being textile, chemical products, metallurgy, cement, cardboard containers, plastic resins and beverages. The sector represents 23.8% of the GDP and employs 20.1% of the workforce. It recently suffered from the slowdown of foreign demand due to the outbreak. Although the industrial sector was negatively impacted by the pandemic, especially due to weak global demand of coal and oil, Industrial activity in Colombia registered a significant recovery in 2021.

The services sector’s importance has increased in recent years. It is becoming the backbone of the Colombian economy as it represents 59.5% of the GDP and employs 64.1% of the workforce. Tourism is one of the most important components of the service sector and has been particularly dynamic over the past few years, especially in Bogota, Medellin, Cartagena, Cali, and Barranquilla. The BPO sub-sector is one of the most dynamic with an average annual growth of 19% during the last 7 years. The services sector was hit the hardest during the early stages of the pandemic, especially tourism, hotels, restaurants, transport, and entertainment. However, in 2021, services showed a significant recovery as vaccination rates rose and people's mobility increased.

 
Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 15.8 20.1 64.1
Value Added (in % of GDP) 7.7 23.8 59.7
Value Added (Annual % Change) 2.8 -13.6 -4.9

Source: World Bank, Latest Available Data. Because of rounding, the sum of the percentages may be smaller/greater than 100%.

 

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Indicator of Economic Freedom

Definition:

The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labour freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.}}

Score:
68,1/100
World Rank:
49
Regional Rank:
6

Economic freedom in the world (interactive map)
Source: Index of Economic Freedom, Heritage Foundation

 

Business environment ranking

Definition:

The business rankings model measures the quality or attractiveness of the business environment in the 82 countries covered by The Economist Intelligence Unit’s Country Forecast reports. It examines ten separate criteria or categories, covering the political environment, the macroeconomic environment, market opportunities, policy towards free enterprise and competition, policy towards foreign investment, foreign trade and exchange controls, taxes, financing, the labour market and infrastructure.

Score:
6.21/10
World Rank:
51/82

Source: The Economist Intelligence Unit - Business Environment Rankings 2020-2024

 

Country Risk

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