Colombia - Overview
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Growth, which had resumed strongly after the 2008-2009 crisis, remained over 4.5% a year since then and, supported by the increase in public spending in favor of both investment and consumption, was 3.7% in 2013.
The authorities have taken measures to preserve the public finances (in a chronic deficit), mainly by imposing restrictions in issuing bank credits and by keeping the stability of the macro-economic indicators. The new government of president Santos has launched an ambitious program of reforms aiming to reinforce taxes, to improve the management of territorial income drawn by royalties, to increase competitiveness and to control the Peso appreciation. The fight against poverty and the development of real estate are also part of the priorities in 2014.
The unemployment rate dropped under 10% of the active population since 2011 and was 9.5% in 2013. More than half of the Colombian people continue to work in the informal sector. The purchasing power of Colombians has stopped decreasing since 2012, the rise in the cost of living standing at 2.4% only in 2013. The poverty level remains high in 2014 (45% of the population), inequalities are strong and despite the retreat of the guerrillas, internal tensions persists and corruption remains.
Industry represents around 30% of the GDP and employs 20% of the active population. Colombia's main industries are textile, chemical products, metallurgy, cement, cardboard containers, plastic resins and beverages.
Colombia's main economic sector is the services sector, which represents more than 63% of the GDP and employs 62% of the active population.
Foreign trade overview
The free-trade agreement with the United States came into force on the 15th of May 2012. Its impact is particularly strong for Colombia considering that the United States is by far the biggest trade partner of the country. Colombia mainly exports oil, coal, coffee, flowers, textile products, ferronickel, bananas and chemical products. Its main clients are the United States (representing 37% of exports in 2013), China, Spain and Venezuela.
Imports are constituted mainly of primary resources and machinery and equipment for the industry, grains, chemical products, transport equipment, electric and electronic equipment. Colombia's main suppliers are the United States (over 27% of imports in 2013), China, Mexico and Germany.
Fuelled by the Chinese demand for raw materials, exports rose sharply every year since 2011.
The improvement of the security conditions during these recent years has contributed to re-establish investor's confidence. FDI inflows, which attained a record level in 2008, dried up in 2009 due to the global economic crisis. However, the economic growth remained strong (+4.7% in 2012 and +4% in 2013) and foreign investors remain present in Colombia, contributing to the regular increase of FDI since 2010. The two main destinations of FDI are the hydrocarbon and mining sectors (they represented 50% of the FDI in 2013), but a diversification has been observed in the last recent years, in particular in telecommunication and tourism. In the context of economic stability, FDI is registering significant increases since 2011, a tendency which should continue in 2014. In 2013 FDI reached USD 15.823 billion.
In Colombia FDI benefit from a very attractive legislative framework. The ratification of a bilateral free-trade agreement by the USA in October 2011 and the establishment of special regulations in the free zones have contributed to improve the country's appeal. Moreover, the richness of its natural resources and a significant domestic market are Colombia's main assets.
Information on the 2013 FDI influx in this region can be accessed in the Global Investment Trade Monitor published in January 2014 by the United Nations Conference on Trade and Development (UNCTAD).