Colombia Economic Forecast

Colombia Economic Outlook

December 4, 2018

Economic growth weakened slightly in Q3 as the government intensified its fiscal consolidation efforts and fixed investment growth slid on weaker business confidence and a wider slowdown in manufacturing activity. Leading indicators point to a moderation going into Q4, with consumer confidence falling further into negative territory in October on downbeat sentiment over general economic conditions. The manufacturing PMI also lost ground in October–November. After failing to gain approval for the first and second draft of the tax bill, the government is set to present a notably watered-down tax reform proposal to Congress, with its original revenue target halved. Fierce opposition forced the government to abandon the planned tax of basic foodstuffs, thereby compelling a freeze on spending in order to meet the fiscal goals and avert a potential credit rating downgrade.

Colombia Economic Growth

The economy is expected to gain steam next year, powered by higher oil prices, increased investment in the extractives sector and an upturn in domestic demand. A tighter labor market should buoy private consumption, while an acceleration in fixed investment should also fuel growth. However, although the country’s debt dynamics have improved, slashing corporate taxes could present challenges in meeting the fiscal targets, notwithstanding the positive impact on investment. 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 Yield7.020.0 %Nov 29
Exchange Rate3,239-0.17 %Nov 29
Stock Market11,995-0.66 %Nov 29

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