Economic overview Colombia, in 36 editions.

Economic activity development has slowed gradually since 1986, but growth rates remain high by Latin American standards. Conservative economic policies have encouraged investment and kept inflation and unemployment under near 30% and 10%, respectively. The rapid development of oil, coal, and other nontraditional industries over the past four years has helped to offset the decline in coffee prices--Colombia's major export. The collapse of the International Coffee Agreement in the summer of 1989, a troublesome rural insurgency, and drug-related violence dampen prospects for future growth.

Economic development has slowed gradually since 1986, but growth rates
remain high by Latin American standards. Conservative economic policies have
kept inflation and unemployment near 30% and 10%, respectively. The rapid
development of oil, coal, and other nontraditional industries over the past
four years has helped to offset the decline in coffee prices--Colombia's prices - Colombia's
major export. The collapse of the International Coffee Agreement in the
summer of 1989, a troublesome rural insurgency, and drug-related violence dampen prospects for future growth.
have dampened growth, but significant economic reforms are likely to
facilitate a resurgent economy in the medium term. These reforms center on
fiscal restraint, trade liberalization, and privatization of state utilities
and commercial banks.

Economic development has slowed gradually since 1986, but growth rates
remain high by Latin American standards. Conservative economic policies have
kept inflation and unemployment near 30% and 10%, respectively. The rapid
development of oil, coal, and other nontraditional industries over the past in recent
four years has helped to offset the decline in coffee prices - Colombia's
major
export. The collapse of the International Coffee Agreement in the
summer of
1989, a troublesome rural insurgency, energy rationing, and drug-related violence
violence have dampened growth, but significant economic reforms are likely to growth. The level of violence, in Bogota in
facilitate a resurgent economy particular, surged to higher levels in the medium term. first quarter of 1993, further
delaying the economic resurgence expected from government reforms. These
reforms center on
fiscal restraint, trade and investment liberalization,
financial and labor reform, and privatization of state utilities
and
commercial banks.

Boasting a diversified and stable economy,
Colombia has enjoyed Latin America's most consistent record of
growth
over the last several decades. Gross domestic product Domestic Product (GDP)
has
expanded every year for more than 25 years, and unlike many
other South
Latin American countries, Colombia did not default on any of
its
official debts during the "lost decade" of the 1980s. Since
1990, when
Bogota introduced a comprehensive reform program that
opened the
economy to foreign trade and investment, GDP growth has
averaged more
than 4% annually. Growth has been fueled in recent
years by the rapid
expansion of the oil sector, progress in the construction and
financial service
industries industries, and an influx of foreign capital. Some foreign investors
have been deterred by an inadequate energy and transportation
infrastructure and the violence stemming from drug trafficking and Direct
persistent rural guerrilla warfare, but direct foreign investment,
especially in the oil industry, is still rising at a
rapid rate.
Although In 1996, oil consequently is overtaking overtook coffee as the Colombia's main legal
export, earnings from illicit drugs probably exceed those from any
other export.
Non-petroleum economic growth has been slowing,
slowed, however, in part because the tight monetary policies adopted due mostly to high
offset interest rates - the inflationary impact result of high capital inflows and rising
government spending have slowed local sales and investment. Business a tight
monetary policy - and a real appreciation of the exchange rate.
Business confidence was also has been damaged by a political crisis stemming from
from allegations that senior government officials, including President
SAMPER, SAMPER solicited contributions from drug
traffickers during the
1994 election campaign. The slowdown in the growth of
labor-intensive industries such as manufacturing has caused a small
rise in unemployment to rise to 11.5% by the end of 1996 and interfered with
President SAMPER'S plans to
lower the country's poverty rate, which
has remained at about 40%
despite the expanding economy. Nevertheless, the booming oil sector,
growing foreign investment, and the fundamental stability of the
economy promise to keep growth positive for the foreseeable future,
barring severe, unpredictable shocks from developments in the
political or international arenas.

Colombia is poised for moderate muted growth in the next several years, marking an end to continued recovery from the severe 1999 recession when GDP fell by about 5%. 4%. President PASTRANA's well-respected economic team is taking steps working to keep the recovery economy on track, such as lowering maintaining low interest rates and shoring up the financial system. rates, for example. In accordance with its IMF loan agreement with the IMF, agreement, the administration has pledged to take additional also is taking steps to restore growth, reduce inflation, and improve the public sector's fiscal health. Many However, many challenges to sustainable growth remain, however. improved prosperity remain. Unemployment reached was stuck at a record 20% in 1999 and may remain high, 2000, contributing to the extreme inequality in income distribution. Two of Colombia's leading exports, oil and coffee, face an uncertain future: future; new exploration is needed to offset a pending decline in declining oil production, and the while coffee harvest has dropped off because of aging plantations harvests and natural disasters. prices are depressed. The lack of public security is a key concern for investors, making progress in the government's peace negotiations with insurgent groups an important driver of economic performance. Colombia is looking for continued support from the international financial assistance community to boost economic recovery and peace prospects.

Colombia is poised for muted growth in the next several years, marking continued recovery from the severe 1999 recession when GDP fell by about 4%. President PASTRANA's well-respected economic team is working to keep the Colombia's economy on track, maintaining low interest rates, for example. In accordance with its IMF loan agreement, the administration also is taking steps to improve the public sector's fiscal health. However, many challenges to improved prosperity remain. Unemployment was stuck at suffered from weak domestic demand, austere government budgets, and a record 20% difficult security situation. A new president takes office in 2000, contributing 2002 and will face economic challenges ranging from pension reform to the extreme inequality in income distribution. reduction of unemployment. Two of Colombia's leading exports, oil and coffee, face an uncertain future; new exploration is needed to offset declining oil production, while coffee harvests and prices are depressed. The lack of Problems in public security is are a key concern for investors, making Colombian business leaders, who are calling for progress in the government's peace negotiations with insurgent groups an important driver of economic performance. groups. Colombia is looking for continued support from the international community to boost economic and peace prospects.

Colombia's economy suffered suffers from weak domestic and foreign demand, austere government budgets, and a difficult security situation. A serious internal armed conflict. Other economic problems facing the new president takes office in 2002 and will face economic challenges ranging URIBE range from reforming the pension reform system to reduction of reducing high unemployment. Two of Colombia's leading exports, oil and coffee, face an uncertain future; new exploration is needed to offset declining oil production, while coffee harvests and prices are depressed. Problems in public security are a concern for Colombian business leaders, who leaders are calling for greater progress in solving the government's peace negotiations conflict with insurgent groups. Colombia is looking for continued support from On the positive side, several international community to boost financial institutions have praised the economic reforms introduced by President URIBE and peace prospects. have pledged enough funding to cover Colombia's debt servicing costs in 2003.

Colombia's economy suffers from weak domestic and foreign demand, austere government budgets, and serious internal armed conflict. conflict, but seems poised for recovery. Other economic problems facing the new president President URIBE range from reforming the pension system to reducing high unemployment. Two of Colombia's leading exports, oil and coffee, face an uncertain future; new exploration is needed to offset declining oil production, while coffee harvests and prices are depressed. Colombian business leaders are calling for greater progress in solving the conflict with insurgent groups. On the positive side, several international financial institutions have praised the economic reforms introduced by President URIBE URIBE, which includes measures designed to reduce the public-sector deficit below 2.5% of GDP in 2004. The government's economic policy and democratic security strategy have pledged enough funding to cover Colombia's debt servicing costs engendered a growing sense of confidence in 2003. the economy, particularly within the business sector, and GDP growth in 2003 was among the highest in Latin America.

Colombia's economy suffers from weak domestic and foreign demand, has been on a recovery trend during the past two years despite a serious armed conflict. The economy continues to improve thanks to austere government budgets, focused efforts to reduce public debt levels, and serious internal armed conflict, but seems poised for recovery. Other an export-oriented growth focus. Ongoing economic problems facing President URIBE range from reforming the pension system to reducing high unemployment. Two of Colombia's leading exports, oil and coffee, face an uncertain future; new New exploration is needed to offset declining oil production, while coffee harvests and prices are depressed. production. On the positive side, several international financial institutions have praised the economic reforms introduced by URIBE, which includes include measures designed to reduce the public-sector deficit below 2.5% of GDP in 2004. GDP. The government's economic policy and democratic security strategy have engendered a growing sense of confidence in the economy, particularly within the business sector, and GDP growth in 2003 was among sector. Coffee prices have recovered from previous lows as the highest Colombian coffee industry pursues greater market shares in Latin America. developed countries such as the United States.

Colombia's economy has been on a recovery trend during the past two years despite a serious armed conflict. The economy continues to improve thanks to austere government budgets, focused efforts to reduce public debt levels, and an export-oriented growth focus. strategy, and an improved security situation in the country. Ongoing economic problems facing President URIBE range from reforming the pension system to reducing high unemployment. New exploration is needed to offset declining oil production. On the positive side, several international financial institutions have praised the economic reforms introduced by URIBE, which include measures designed to reduce succeeded in reducing the public-sector deficit below 2.5% 1.5% of GDP. The government's economic policy and democratic security strategy have engendered a growing sense of confidence in the economy, particularly within the business sector. Coffee prices have recovered from previous lows as the Colombian coffee industry pursues greater market shares in developed countries such as the United States.

Colombia's economy has been on a recovery trend during experienced positive growth over the past two three years despite a serious armed conflict. The economy continues to improve thanks to in part because of austere government budgets, focused efforts to reduce public debt levels, an export-oriented growth strategy, and an improved security situation in the country. country, and high commodity prices. Ongoing economic problems facing President URIBE range from reforming the pension system to reducing high unemployment. New unemployment, and to achieving congressional passage of a fiscal transfers reform; furthermore, new exploration is needed to offset declining oil production. On the positive side, several international financial institutions have praised the economic reforms introduced by URIBE, which succeeded in reducing However, the public-sector deficit below 1.5% of GDP. The government's economic policy and policy, democratic security strategy strategy, and the signing of a free trade agreement with the US have engendered a growing sense of confidence in the economy, particularly within the business sector. Coffee prices have recovered from previous lows as the Colombian coffee industry pursues greater market shares in developed countries such as the United States.

Colombia's economy has experienced positive growth over the past three five years despite a serious armed conflict. In fact, 2007 is regarded by policy makers and the private sector as one of the best economic years in recent history, after 2005. The economy continues to improve in part because of austere government budgets, focused efforts to reduce public debt levels, an export-oriented growth strategy, an improved security situation in the country, domestic security, and high commodity prices. Ongoing economic problems facing President URIBE range from include reforming the pension system to system, reducing high unemployment, and to achieving congressional passage of a fiscal transfers reform; furthermore, funding new exploration is needed to offset declining oil production. However, the The government's economic policy, reforms and democratic security strategy, and the signing of a free trade agreement coupled with the US increased investment, have engendered a growing sense of confidence in the economy, particularly within economy. However, the business sector. sector continues to be concerned about failure of the US Congress to approve the signed FTA.

Colombia has experienced accelerating growth between 2002 and 2007, with expansion above 7% in 2007, chiefly due to advancements improvements in domestic security, to rising commodity prices, and to President URIBE's promarket economic policies. Colombia's sustained growth helped reduce poverty by 20% Foreign direct investment reached a record $10 billion in 2008, and cut unemployment by 25% since 2002. Additionally, investor friendly reforms continues to flow in, especially in the oil sector. A series of policies enhanced Colombia's hydrocarbon sector investment climate: pro-business reforms in the oil and gas sectors and export-led growth fueled mainly by the US-Colombia Andean Trade Promotion Agreement (CTPA) negotiations have attracted record levels of foreign investment. and Drug Eradication Act. Inequality, underemployment,and underemployment, and narcotrafficking remain significant challenges, and Colombia's infrastructure requires significant updating in order major improvements to sustain economic expansion. Economic growth slipped in 2008 as a result Because of the global financial crisis and weakening demand for Colombia's exports. In response, URIBE's administration has cut capital controls, arranged for emergency credit lines from multilateral institutions, and promoted investment incentives such as exports, Colombia's modernized free trade zone mechanism, legal stability contracts, and new bilateral investment treaties economy grew only 2.7% in 2008, and trade agreements. 0.8% in 2009 but rebounded to around 4.5% in 2010. The government has also encouraged exporters to diversify their customer base away from beyond the United States and Venezuela, traditionally Colombia's largest trading partners. Nevertheless, partners; the business sector SANTOS administration continues to be concerned about pursue free trade agreements with Asian and South American partners and awaits the impact approval of a global recession Canadian trade accord by Canada's and EU's parliaments. The business sector remains concerned about Venezuela's trade restrictions on Colombia's Colombian exports, as well as an appreciating domestic currency, and the pending US Congressional approval of the CTPA, which is stalled in the US Congress. US-Colombia Trade Promotion Agreement.

The SANTOS administration has highlighted five "locomotives" to stimulate economic growth: extractive industries; agriculture; infrastructure; housing; and innovation. Colombia experienced accelerating growth between 2002 is third largest exporter of oil to the United States. President SANTOS, inaugurated in August 2010, introduced unprecedented legislation to better distribute extractive industry royalties and 2007, chiefly compensate Colombians who lost their land due to decades of violence. He also seeks to build on improvements in domestic security, rising commodity prices, security and to on President URIBE's promarket economic policies. Foreign direct investment reached a record $10 billion in 2008, and continues but dropped to flow in, especially $7.2 billion in 2009, before beginning to recover in 2010, notably in the oil sector. A series of policies enhanced Colombia's investment climate: pro-business Pro-business reforms in the oil and gas sectors and export-led growth growth, fueled mainly by the Andean Trade Promotion and Drug Eradication Act. Act, have enhanced Colombia's investment climate. Inequality, underemployment, and narcotrafficking remain significant challenges, and Colombia's infrastructure requires major improvements to sustain economic expansion. Because of the global financial crisis and weakening demand for Colombia's exports, Colombia's economy grew only 2.7% in 2008, and 0.8% in 2009 but rebounded to around 4.5% 4.4% in 2010. In late 2010, Colombia experienced its most severe flooding in decades, with damages estimated to exceed $6 billion. The government has encouraged exporters to diversify their customer base beyond the United States and Venezuela, traditionally Colombia's largest trading partners; the SANTOS administration continues to pursue free trade agreements with Asian and South American partners and awaits the approval of a Canadian trade accord with Canada is expected to go into effect in 2011, while a negotiated trade agreement with the EU has yet to be approved by Canada's and EU's parliaments. The the EU parliament. Improved relations with Venezuela have eased worries about restrictions on bilateral trade, but the business sector remains concerned about Venezuela's trade restrictions on Colombian exports, an appreciating domestic currency, and the pending US Congressional approval of the US-Colombia Trade Promotion Agreement.

Colombia's consistently sound economic policies and aggressive promotion of free trade agreements in recent years have bolstered its ability to face external shocks. Real GDP has grown more than 4% per year for the past three years, continuing almost a decade of strong economic performance. All three major ratings agencies have upgraded Colombia's government debt to investment grade. Nevertheless, Colombia depends heavily on oil exports, making it vulnerable to a drop in oil prices. Economic development is stymied by inadequate infrastructure, weakened further by recent flooding. Moreover, the unemployment rate of 10.3% in 2012 is still one of Latin America's highest. The SANTOS Administration's foreign policy has focused on bolstering Colombia's commercial ties and boosting investment at home. The US-Colombia Free Trade Agreement (FTA) was ratified by the US Congress in October 2011 and implemented in 2012. Columbia Colombia has signed or is negotiating FTAs with a number of other countries, including Canada, Chile, Mexico, Switzerland, the EU, Venezuela, South Korea, Turkey, Japan, China, Costa Rica, Panama, and Israel. Foreign direct investment - notably in the oil sector and gas sectors - reached a record $10 billion in 2008 but dropped to $7.2 billion in 2009, before beginning to recover in 2010, and reached a record high of nearly $16 billion in 2012. Colombia is the third largest Latin American exporter of oil to the US. United States, and the United States' largest source of imported coal. Inequality, underemployment, and narcotrafficking remain significant challenges, and Colombia's infrastructure requires major improvements to sustain economic expansion.

Colombia's consistently sound economic policies and aggressive promotion of free trade agreements in recent years have bolstered its ability to face weather external shocks. Real GDP has grown more than 4% per year for the past three years, continuing almost a decade of strong economic performance. All three major ratings agencies have upgraded Colombia's government debt to investment grade. Nevertheless, Colombia depends heavily on oil energy and mining exports, making it vulnerable to a drop in oil commodity prices. Colombia is the world's fourth largest coal exporter and Latin America’s fourth largest oil producer. Economic development is stymied by inadequate infrastructure, weakened further by recent flooding. infrastructure and an uncertain security situation. Moreover, the unemployment rate of 10.3% 9.7% in 2012 2013 is still one of Latin America's highest. The SANTOS Administration's foreign policy has focused on bolstering Colombia's commercial ties and boosting investment at home. The US-Colombia Free Trade Agreement (FTA) was ratified by the US Congress in October 2011 and implemented in 2012. Colombia has signed or is negotiating FTAs Free Trade Agreements (FTA) with more than a number dozen countries; the US-Colombia FTA went into force on May 2012. Colombia is also a founding member of other countries, including Canada, the Pacific Alliance - a regional grouping formed in 2012 by Chile, Colombia, Mexico, Switzerland, the EU, Venezuela, South Korea, Turkey, Japan, China, Costa Rica, Panama, and Israel. Foreign Peru to promote regional trade and economic integration. In 2013, Colombia began its ascension process to the OECD. The annual level of foreign direct investment - notably in the oil and gas sectors - reached a record $10 billion in 2008 but dropped to $7.2 billion in 2009, before beginning to recover in 2010, and reached a record high of nearly $16 $16.8 billion in 2012. Colombia is the third largest Latin American exporter of oil to the United States, and the United States' largest source 2013, an increase of imported coal. 7% over 2012. Inequality, underemployment, poverty, and narcotrafficking remain significant challenges, and Colombia's infrastructure requires major improvements to sustain economic expansion.

Colombia's consistently sound economic policies and aggressive promotion of free trade agreements in recent years have bolstered its ability to weather external shocks. Real GDP has grown more than 4% per year for the past three four years, continuing almost a decade of strong economic performance. All three major ratings agencies have upgraded Colombia's government debt to investment grade. Nevertheless, grade, which helped to attract record levels of investment in 2013 and 2014, mostly in the hydrocarbons sector. Colombia depends heavily on energy and mining exports, making it vulnerable to a drop in commodity prices. Colombia is the world's fourth largest coal exporter and Latin America’s America's fourth largest oil producer. Economic development is stymied by inadequate infrastructure infrastructure, inequality, poverty, narco-trafficking and an uncertain security situation. Moreover, the unemployment rate of 9.7% 9.2% in 2013 2014 is still one of Latin America's highest. The SANTOS Administration's foreign policy has focused on bolstering Colombia's commercial ties and boosting investment at home. Colombia has signed or is negotiating Free Trade Agreements (FTA) with more than a dozen countries; the US-Colombia FTA went into force on May 2012. Colombia is also a founding member of the Pacific Alliance - a regional grouping formed in 2012 by Chile, Colombia, Mexico, and Peru to promote regional trade and economic integration. In 2013, Colombia began its ascension process to the OECD. In 2014, Colombia passed a tax reform bill to offset the lost revenue from the global drop in oil prices. The annual level SANTOS administration is also using tax reform to help finance implementation of foreign direct investment - notably a peace deal, in the oil event FARC and gas sectors - reached a record high of $16.8 billion in 2013, the government reach an increase of 7% over 2012. Inequality, poverty, and narcotrafficking remain significant challenges, and Colombia's infrastructure requires major improvements to sustain agreement in 2015. Colombian officials estimate a peace deal may bolster economic expansion. growth by almost 2%.

Colombia heavily depends on energy and mining exports, making it vulnerable to fluctuations in commodity prices. Colombia is Latin America’s fourth largest oil producer and the world’s fourth largest coal producer, third largest coffee exporter, and second largest cut flowers exporter. Colombia’s economic development is hampered by inadequate infrastructure, poverty, narcotrafficking, and an uncertain security situation, in addition to dependence on primary commodities.
commodities (goods that have little value-added from processing or labor inputs). Colombia’s economy slowed in 2017 because of falling global oil world market prices for oil and lower domestic oil production due to insurgent attacks on pipeline infrastructure. Although real GDP growth averaged 4.7% during the past decade, it fell to an estimated 1.8% in 2017. Declining oil prices also have contributed to reduced government revenues. In 2016, oil revenue dropped below 4% of the federal budget and likely remained below 4% in 2017. A Western credit rating agency in December 2017 downgraded Colombia’s sovereign credit rating to BBB-, because of weaker-than-expected growth and increasing external debt. Colombia has struggled to address local referendums against foreign investment, which have slowed its expansion, especially in the oil and mining sectors. Colombia’s FDI declined by 3% to $10.2 billion between January and September 2017.
Colombia has signed or is negotiating Free Trade Agreements (FTA) with more than a dozen countries; the US-Colombia FTA went into effect in May 2012. Colombia is a founding member of the Pacific Alliance—a regional trade block formed in 2012 by Chile, Colombia, Mexico, and Peru to promote regional trade and economic integration. The Colombian government took steps in 2017 to address several bilateral trade irritants with the US, including those on truck scrappage, distilled spirits, pharmaceuticals, ethanol imports, and labor rights. Colombia hopes to accede to the Organization for Economic Cooperation and Development.

Colombia heavily depends on energy and mining exports, making it vulnerable to fluctuations in commodity prices. Colombia is Latin America’s fourth largest oil producer and the world’s fourth largest coal producer, third largest coffee exporter, and second largest cut flowers exporter. Colombia’s economic development is hampered by inadequate infrastructure, poverty, narcotrafficking, and an uncertain security situation, in addition to dependence on primary commodities (goods that have little value-added from processing or labor inputs).
Colombia’s economy slowed in 2017 because of falling world market prices for oil and lower domestic oil production due to insurgent attacks on pipeline infrastructure. Although real GDP growth averaged 4.7% during the past decade, it fell to an estimated 1.8% in 2017. Declining oil prices also have contributed to reduced government revenues. In 2016, oil revenue dropped below 4% of the federal budget and likely remained below 4% in 2017. A Western credit rating agency in December 2017 downgraded Colombia’s sovereign credit rating to BBB-, because of weaker-than-expected growth and increasing external debt. Colombia has struggled to address local referendums against foreign investment, which have slowed its expansion, especially in the oil and mining sectors. Colombia’s FDI declined by 3% to $10.2 billion between January and September 2017.
Colombia has signed or is negotiating Free Trade Agreements (FTA) with more than a dozen countries; the US-Colombia FTA went into effect in May 2012. Colombia is a founding member of the Pacific Alliance—a regional trade block formed in 2012 by Chile, Colombia, Mexico, and Peru to promote regional trade and economic integration. The Colombian government took steps in 2017 to address several bilateral trade irritants with the US, including those on truck scrappage, distilled spirits, pharmaceuticals, ethanol imports, and labor rights. Colombia hopes to accede to the Organization for Economic Cooperation and Development.