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Economic Overview

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 (%) 3.52.53.23.53.0
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

Country Risk

See the country risk analysis provided by La Coface.

 

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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.

 
Monetary Indicators 20162017201820192020
Colombian Peso (COP) - Average Annual Exchange Rate For 1 USD 3,054.122,951.332,955.703,280.803,694.85

Source: World Bank - Latest available data.

 

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Foreign Trade

Colombia's foreign trade represented 33.7% of the country’s GDP in 2020, according to the World Bank. Colombia mainly exports petroleum oils (40.3%), coal (12.4%), coffee (6%), gold (4.4%), and flowers (3.7%). The country's main imports include petroleum oils (7.9%), transmission apparatus for radio-telephony (4.8%), motor vehicles (4.6%), medicaments (3%), and maize (2.3%).

Colombia's main trade partners are the United States, China, Brazil, Mexico, Ecuador, Panama, and Germany. Colombia has signed trade agreements with the ANC countries (Andean Community of Nations), the MERCOSUR countries, the Central American and Caribbean countries and the European Union. Along with Mexico, Chile and Peru, Colombia founded the Pacific Alliance in 2012, designed to boost trade relations with Asian emerging markets. The country is also part of numerous free trade agreements with Chile, Guatemala, Honduras, El Salvador, Canada, Mexico, Switzerland, Norway, Iceland, Liechtenstein and the United States. The free-trade agreement with the United States, which came into force in May 2012, has had a particularly large impact in the Colombian economy, given that the United States is the country's biggest trade partner.

In 2020, Colombian exports suffered from falling oil prices and the economic slowdown in its key partner markets brought on by the pandemic. Indeed, the country’s exports decreased from USD 39.4 billion in 2019 to USD 31 billion in 2020. Over the same period, imports of goods decreased from USD 52.7 billion in 2019 to USD 43.4 billion in 2020. As a result, Colombia's trade deficit reached USD 7.9 billion in 2020. According to WTO, imports of services in 2020 amounted to USD 9 billion, far greater than exports of services, which totalled USD 4.8 billion in 2020. Thus, the overall trade deficit in 2020 reached USD 12.4 billion.

 
Foreign Trade Values 20162017201820192020
Imports of Goods (million USD) 44,89046,07651,23352,70343,489
Exports of Goods (million USD) 31,04536,89741,77439,48931,008
Imports of Services (million USD) 10,81612,29613,37313,7669,092
Exports of Services (million USD) 7,7968,1719,4799,7944,896

Source: World Trade Organisation (WTO) ; Latest available data

Foreign Trade Indicators 20162017201820192020
Foreign Trade (in % of GDP) 36.235.336.537.533.7
Trade Balance (million USD) -9,176-4,470-5,144-8,451-7,918
Trade Balance (Including Service) (million USD) -13,452-8,946-9,501-12,876-12,421
Imports of Goods and Services (Annual % Change) -3.51.05.87.3-18.0
Exports of Goods and Services (Annual % Change) -0.22.60.63.1-17.4
Imports of Goods and Services (in % of GDP) 21.520.120.621.720.0
Exports of Goods and Services (in % of GDP) 14.715.115.915.913.7

Source: World Bank ; Latest available data

Foreign Trade Forecasts 20212022 (e)2023 (e)2024 (e)2025 (e)
Volume of exports of goods and services (Annual % change) 0.512.34.82.63.3
Volume of imports of goods and services (Annual % change) 6.25.74.23.03.1

Source: IMF, World Economic Outlook ; Latest available data

Note: (e) Estimated Data

 
International Economic Cooperation
Colombia has signed many international trade agreements, including:

- Latin American Association of Integration - ALADI
- Andean Community - CAN -Colombia, Equator, Peru, Bolivia
- CAN - Mercosur
- Central American and the Caribbeans
- FTA - Free Trade Agreement Colombia and Chile
- FTA Colombia, El Salvador, Guatemala and Honduras
- FTA Colombia, Peru and Canada
- FTA G2- Group of Two - Colombia and Mexico
- FTA Colombia and Peru - EFTA
- FTA Colombia and United States
- Trade Union CAN - UE

Colombia is part of the Pacific Alliance.

For more information consult this link.

 

Main Partner Countries

Main Customers
(% of Exports)
2019
United States 31.1%
China 11.6%
Panama 6.0%
Brazil 3.7%
Mexico 3.6%
See More Countries 44.1%
Main Suppliers
(% of Imports)
2019
United States 25.4%
China 20.8%
Mexico 7.4%
Brazil 6.0%
Germany 4.1%
See More Countries 36.3%

Source: Comtrade, Latest Available Data

 

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Political Outline

Current Political Leaders
President: Iván Duque Márquez (since 7 August 2018)
Vice President: Marta Lucia Ramírez Blanco (since 7 August 2018)
Next Election Dates
Presidential: May 2022
Congress: March 2022
Main Political Parties
About 60 political parties are formally recognised in Colombia, but most are not represented in the Chamber of Deputies. The main political parties in Colombia are:

- Social Party of National Unity (UN): centre-right, social liberalism, third way politics
- Democratic Centre (CD): centre-right, social conservatism, economic liberalism
- Conservative Party (PC): centre-right, social conservatism, economic liberalism, Christian democracy
- Colombian Liberal Party (PLC): centre-left, social liberalism, social democracy
- Radical Change Party (CR): centre-right, conservative liberalism
- Alternative Democratic Pole (PDA): centre-left, protectionism, social democracy, democratic socialism
- Independent Movement of Absolute Renovation (MIRA): centre-right to right, conservative liberalism, social conservatism, Christian democracy
- Green Alliance: centre-left, progressivism, pacifism, green politics, green liberalism
- Commons (Comunes): far-left, bolivarianism, communism, anti-capitalism, anti-imperialism

Executive Power
The President is both the Head of State and the Head of Government. He or she holds executive power. The President and Vice President are both elected by universal suffrage for a single term of four years.
Legislative Power
The Colombian legislature is bicameral. The parliament, called 'Congress', consists of the Senate (upper house) and the Chamber of Deputies (lower chamber). The 108 members of the Senate and the 172 members of the Chamber of Deputies are elected for a period of four years by universal suffrage.
 

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COVID-19 Country Response

COVID-19 epidemic evolution
To find out about the latest status of the COVID19 pandemic evolution and the most up-to-date statistics on the COVID19 disease in Colombia, please visit the Colombian government platform with the official data. Official information on the progress of the epidemic in Colombia is consolidated by the Ministry of Health, which provides a daily epidemiological update and key national figures, and the Administrative Department of the Presidency website.
For the international outlook you can consult the latest situation reports published by the World Health Organisation as well as the global daily statistics on the coronavirus pandemic evolution including data on confirmed cases and deaths by country.
Sanitary measures
To find out about the latest public health situation in Colombia and the current sanitary measures in vigour, please consult the Colombian government platform Coronavirus Colombia, including the up-to-date information on the containment measures put in place and public health recommendations.
Travel restrictions
The COVID-19 situation, including the spread of new variants, evolves rapidly and differs from country to country. All travelers need to pay close attention to the conditions at their destination before traveling. Regularly updated information for all countries with regards to Covid-19 related travel restrictions in place including entry regulations, flight bans, test requirements and quarantine is available on TravelDoc Infopage.
It is also highly recommended to consult COVID-19 Travel Regulations Map provided and updated on the daily basis by IATA.
The US government website of Centers of Disease Control and Prevention provides COVID-19 Travel Recommendations by Destination.

The UK Foreign travel advice also provides travelling abroad advice for all countries, including the latest information on coronavirus, safety and security, entry requirements and travel warnings.
Import & export restrictions
For the information on all the measures applicable to movement of goods during the period of sanitary emergency due to the COVID-19 outbreak (including eventual restrictions on imports and exports, if applicable), please consult the portal of the Ministry of Trade, Industry and Tourism, Trabajo en comercio exterior.
For a general overview of trade restrictions due to COVID-19 pandemic, please consult the section dedicated to Colombia on the International Trade Centre's COVID-19 Temporary Trade Measures webpage.
Economic recovery plan
For the information on the economic recovery scheme put in place by the Colombian government to address the impact of the COVID19 pandemic on the Colombian economy, please visit the portal of the Ministry of Trade, Industry and Tourism (MINCIT) Colombia sigue adelante. The information on the Colombian economic emergency plan is available here.

For the general overview of the key economic policy responses to the COVID-19 outbreak (fiscal, monetary and macroeconomic) taken by the Colombian government to limit the socio-economic impact of the COVID-19 pandemic, please consult the section dedicated to Colombia in the IMF’s Policy Tracker platform.
Support plan for businesses
For the information on the local business support scheme established by the Colombian government to help small and medium-sized companies to deal with the economic impacts of the COVID19 epidemic on their activity, please consult the portal of the Colombian Ministry of Trade, Industry and Tourism (MINCIT): Colombia sigue adelante.

For a general overview of international SME support policy responses to the COVID-19 outbreak refer to the OECD's SME Covid-19 Policy Responses document. You can also consult the World Bank's Map of SME-Support Measures in Response to COVID-19.

Support plan for exporters
To find out about the support plan for exporters put in place by the Colombian government, please consult the support plan for Colombian companies available on the Colombian Ministry of Trade, Industry and Tourism website.
 

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