Colombia Economic Forecast

Colombia Economic Outlook

January 15, 2019

Available data suggests that the economy sustained a solid pace of expansion into the final quarter despite a sharp decline in oil prices. Retail sales grew robustly in October against a backdrop of weak inflation and falling unemployment, signaling stronger private consumption growth. Moreover, industrial production jumped in October and car sales also soared in the month. Survey-based data was less promising, however, with consumer confidence tumbling to a 20-month low in November and the manufacturing PMI declining throughout the quarter. On 19 December, the deeply-divided Congress passed a much watered-down tax reform bill. Most notably, the original revenue has been halved, thus forcing a freeze on COP 6.2 trillion spending in efforts to fund the COP 7.8 trillion 2019 budget without sacrificing its fiscal goals.

Colombia Economic Growth

Growth is expected to climb again in 2019 on an upturn in domestic demand and increased investment in the extractives sector. Private consumption growth should strengthen, thanks to a tighter labor market fueling wage gains. This, coupled with an acceleration in fixed investment, should counter the likely adverse impacts from government expenditure cuts. While fiscal tightening measures are helping to improve the country’s debt dynamics, slashing corporate taxes could present challenges in meeting the targets. Met the why particular panelists expect GDP to grow 3.2% in 2019, which is unchanged from last month’s forecast, and 3.2% again in 2020.

Colombia Economy Data

20132014201520162017
Population (million)47.147.748.248.749.3
GDP per capita (USD)8,1167,9926,0755,8086,377
GDP (USD bn)382381293283314
Economic Growth (GDP, annual variation in %)4.64.73.02.01.8
Domestic Demand (annual variation in %)5.16.22.41.21.8
Consumption (annual variation in %)4.84.63.41.42.2
Investment (annual variation in %)6.89.81.9-2.70.1
Industrial Production (annual variation in %)-1.81.31.83.5-0.6
Retail Sales (annual variation in %)4.78.46.42.0-0.2
Unemployment Rate9.69.18.99.29.4
Fiscal Balance (% of GDP)-2.2-2.6-3.1-3.8-3.2
Public Debt (% of GDP)34.937.441.142.443.0
Money (annual variation in %)14.79.112.56.95.0
Inflation Rate (CPI, annual variation in %, eop)1.93.76.85.74.1
Inflation Rate (CPI, annual variation in %)2.02.95.07.54.3
Inflation (PPI, annual variation in %)-0.16.05.52.23.3
Policy Interest Rate (%)3.254.505.757.504.75
Stock Market (annual variation in %)-11.2-11.0-26.518.213.6
Exchange Rate (vs USD)1,9302,3893,1753,0022,985
Exchange Rate (vs USD, aop)1,8692,0032,7493,0522,952
Current Account (% of GDP)-3.3-5.2-6.3-4.2-3.3
Current Account Balance (USD bn)-12.5-19.8-18.5-12.0-11.4
Trade Balance (USD billion)2.2-6.2-15.6-11.1-6.2
Exports (USD billion)58.854.936.031.837.8
Imports (USD billion)56.661.151.642.844.0
Exports (annual variation in %)-2.2-6.7-34.3-11.818.9
Imports (annual variation in %)0.97.9-15.5-17.02.6
International Reserves (USD)43.647.346.746.747.6
External Debt (% of GDP)24.126.637.742.439.6

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Colombia Facts

ValueChangeDate
Bond Yield6.820.0 %Jan 30
Exchange Rate3,163-0.17 %Jan 30
Stock Market11,901-0.66 %Jan 30

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