Colombia Reduces Poverty Levels

According to Colombia’s National Statistics Department (DANE), the country’s poverty levels dropped two percentage points in 2013.  At the end of 2013, 30.6 percent of Colombians were considered living in poverty, while in 2012 that number had reached 32.7 percent.  The five departments with the highest poverty rates in 2013 were Chocó (63.1percent), Cauca (58.4 percent), La Guajira (55.8 percent), Cordoba (51.8 percent), and Magdalena (50.5 percent).  Colombia’s 2013 GINI coefficient – which measures income inequality – measured 0.539, the same as for 2012.

poverty2                                    Source: DANE

Foreign Portfolio Investment Soars in Colombia

According to the Colombian Central Bank, between January-June 2014, foreign direct portfolio investment increased by 127.6 percent to USD 6.2 billion compared to the same period in 2013.  Net foreign investment inflows to Colombia in the first half of the year rose 29 percent to USD 13.7 billion compared to the same period in 2013. The investment flow increase can be explained in part by the increased weight of Colombian public domestic debt bonds in JPMorgan indexes.

Starbucks Opens First Store in Colombia

Starbucks opened its first store in Colombia on July 16 in Bogota.  The company plans to open over 50 stores in the country within the next five years at an investment of over USD 30 million and will generate about 20 direct jobs per store.  Starbucks purchases about 90 million pounds of Colombian coffee per year, a figure that could increase with the start of its Colombian operation.  The multinational has a Support Center for coffee growers in Manizales, a program developed by the National Federation of Coffee Growers to promote research in the sector.  


Colombia the Most Dynamic Economy in Latin America

Latin American countries had mixed economic results during the first quarter of 2014. Colombia, with a 6.4 percent GDP growth, was the most dynamic country, while Argentina fell into recession.  Peru, Chile, Brazil, and Mexico had declining economic growth rates.  Brazil and Colombia’s Central Banks are raising interest rates to try to contain rising prices.

GDP IQ2014 

                          Source: Central Banks for each country.

Colombia’s June Inflation Rate 0.09%

Colombia’s June inflation rate reached 0.09 percent, down 0.14 percent from the June 2013 inflation of 0.23 percent.  The sectors with the greatest price increases were housing (0.41 percent) and meat and meat derivatives (1.22 percent), according to Colombia’s National Statistics Department (DANE).  The accumulated Consumer Price Index (CPI) for the first half of the year had a 2.57 percent increase, up 0.84 percent from the same period of 2013 (1.73 percent).

Puerto Rico’s New Trade Promotion Office in Colombia

The government of Puerto Rico opened a trade promotion office in Bogotá this week aimed at increasing commercial ties between Colombia and Puerto Rico. According to Puerto Rico’s Department of Economic Development and Commerce (DDEC), the trade promotion office will seek to attract investment and promote exports from the island.  The opening of the Bogotá commercial office follows the start last year of Avianca’s direct route between the Colombian capital and San Juan.  Avianca also recently announced it will increase its direct flights between Bogota and San Juan to three to four times weekly.  


Colombia has the Fifth Largest Economic Growth Outlook in the World for 2014

According to The Economist, Colombia has the fifth largest economic growth prospects for 2014 out of 43 countries, and is highest in the region.  In addition, Colombian Finance Minister Mauricio Cardenas revealed that the Organization for Economic Cooperation and Development (OECD) shares this view.  Colombia’s economic growth projection for 2014 is 4.6 percent, behind China (7.3 percent), India (6.0 percent), Indonesia (5.4 percent), and Malaysia (5.1 percent).

Colombian Economy Could Grow 8% Annually With Peace

The United Nations Program for Development (UNDP) and the Center of Resources for Conflict Analysis revealed a study this week on the impact that peace would have on the Colombian economy.  According to Fabrizio Hochschild, the UN Coordinator and UNDP representative in Colombia, the end of Colombia’s internal conflict would significantly accelerate economic growth.  The study reviewed the conflict from1988 to 2013 and found that it has cost four percent of Colombia’s GDP annually.  Researchers estimate that with peace, GDP growth in 2013 could have reached 8.7 percent instead of the actual 4.3 percent. The report can be accessed at .

Expansion at Bogota’s International Airport Continues

Opain, the company that operates El Dorado airport, presented a proposal this month to expand further Bogota’s international airport.  The project would include eight new access bridges to increase the boarding/terminal area by 20 to 33 percent.    The project would cost USD $200 million, and Opain would recoup all costs by leasing the airport’s commercial concessions.  The National Infrastructure Agency will announce the final schedule for this project during the third quarter of 2014.  


Coffee Production Increased 30% to 11.5 Million Bags

Colombia’s coffee production grew 30 percent in the last 12 months (June 2013-May 2014) and reached 11.5 million bags compared to 8.8 million bags harvested in the same 2012-2013 period.  Exports of Colombian coffee exceeded 10.5 million bags, up 31 percent from 8.1 million bags exported in the same period last year.

Colombian Exports to Venezuela Decreased

Colombia’s exports to Venezuela fell 36.2 percent between May 2013 and March 2014, according to figures from Colombia’s Tax and Customs Authority (DIAN).  During this period, sales of goods from Colombia to Venezuela decreased from USD 150.8 million to USD 96.2 million.  A drop in the sale of cattle and frozen bone-in meat was the main cause of the decline.  Venezuela received the second largest quantity of Colombian exports from January-March 2014 with 4 percent of the total, behind the United States, which received 26.7 percent of total Colombian exports.

May Inflation 0.48%

According to Colombia’s National Statistics Department (DANE), inflation for May 2014 reached 0.48 percent.  Accumulated inflation for the first five months of the year totaled 2.48 percent, 0.99 percent higher than the rate during the same period in 2013.  In response to the upward trend in inflation, the board of Colombia’s Central Bank increased the intervention interest rate to 3.75 percent from 3.5 percent.




 Colombian Companies Invest Abroad

The United Nations Economic Commission for Latin America and the Caribbean (ECLAC) issued a report that highlights the 50 companies with the greatest foreign investment in the region.  The report ranks Colombia fourth after Mexico, Brazil, and Chile for number of companies on the list.  The following six Colombian companies were included in the ECLAC report:  ISA (power transmission), Argos (cement), EPM (utilities), Ecopetrol (oil), Avianca (airline), and Nutresa (food).  Of these, ISA (69 percent), Argos (26 percent), and EPM (26 percent) invest the most of its assets regionally, a strategy that helps them consolidate market positions.  Colombian companies invested a total of USD 35.8 billion in Latin America between 2003 and 2013.   

Colombian Imports grew 4.2% in First Quarter 2014

Colombian imports grew from USD 14.1 billion in IQ 2013 to USD 14.7 billion in IQ 2014.  According to the Colombian National Statistics Department (DANE), manufacturing accounted for 73.7 percent of total imports for 1Q 2014, fuels and extractive industry products 16.3 percent, and agricultural products, food, and beverages 9.8 percent.  Imports from the United States increased 13.9 percent during this period, the greatest increase from any country.

Colombia’s 2014 Oil and Gas Bid Round Attracts Foreign Participants

The president of Colombia’s National Hydrocarbons Agency (ANH), Javier Betancourt, revealed that 49 companies have purchased information packages to date on the 95 blocks that will be awarded in the July oil and gas auction.  The companies that have expressed interest represent 19 countries, including 10 exploration firms that would be new investors in the local market.  For more information on the round please visit .


Government Given Green Light to Sell ISAGEN

On May 22, a Colombian court revoked the temporary suspension of the government’s sale of its stake (57.61 percent) in Isagen, a major power generation company.   The government expects to raise at least USD 2.4 billion, which will be used to help finance the country’s infrastructure projects.  The Colombian government received seven offers for its stake in ISAGEN from:  Duke Energy(USA) with two offers,  China Haudian Corporation (China), Generco S.A. (France), Gas Natural SDG (Spain), Consorcio Cemig-EPM (Brazil-Colombia), and Empresa de EnergÍa de Bogotá (Colombia). 

First Project Awarded in the Fourth Generation (4G) Road Infrastructure Program

The Colombian government’s 4G road infrastructure program is the largest in Latin America and includes 47 projects worth USD 25 billion.  On May 22, the first project was awarded from the first bid round, which included nine projects.  “Conexion Pacifico 2” will be a 44 km. two-way highway in the Antioquia Department and will cost approximately USD 450 million.  It was awarded to the Colombian-Portuguese P.S.F. consortium, comprised of  Colombian companies Grupo Odinsa (25 percent), Mincivil (21.15 percent), Construcciones El Cóndor (21.15 percent), Termotécnica Coindustrial (13.50 percent), and ICEIN SAS (9.20 percent), and the Portuguese company Mota Engil Engenharia e Construção (10%).  For more information on the 4G program please visit:

Presidential Election in Colombia

On May 25, Colombians will vote in the first round of presidential elections.  If no candidate receives over 50 percent of votes, there will be a second voting round on June 15.  The five presidential candidates are:  incumbent Juan Manuel Santos (U Party), Oscar Ivan Zuluaga (Centro Democratico Party), Enrique Peñalosa (Green Party), Marta Lucia Ramirez (Conservative Party), and Clara Lopez (Polo Democratico Party).  According to ANIF, an economic think tank, one of the main economic challenges for the new president will be to increase annual economic growth.  Experts estimate that Colombia’s economy will grow 4.1 percent the next decade, which was lowered from 4.5 percent due to a potential slowdown in future growth of the mining and energy sectors.


New Law Encourages Use of Renewable Energy

The Colombian government issued Law 1715, which establishes a legal framework for the promotion and use of renewable energy as well as for the research and development of clean energy production technologies. The law provides tax and other financial incentives for investments in renewable energy generation. The Colombian government will also implement a program to gradually replace diesel generation in off-grid areas with renewable energy sources. Law 1715 also requires the government to implement measures that promote the use of biomass, wind generation, and geothermal and solar energy. The text of the law can be found here:

2014 Coal Production Target Set at 89.1 Million Tons

The Colombian government set its 2014 coal production target at 89.1 million tons. Coal production in 2013 reached 85.4 million tons, down 4.14 percent from 2012 levels. Colombia is the world’s fourth largest coal exporter and the United States’ largest foreign supplier of coal.

Colombian Industry Grew 4.4% in First Quarter 2014

The Colombian National Statistics Department (DANE) announced that the manufacturing sector grew 4.4 percent in the first quarter of 2014 compared to the same period in 2013. In 1Q 2013, the manufacturing sector had a negative growth of 6.3 percent.


Colombian Oil Reserves Increased 2.8% in 2013

According to the Ministry of Mines and Energy, oil reserves reached 2.4 billion barrels at the end of 2013 as a result of new oil discoveries.  The additional 436 million barrels of oil represent a modest 2.86 percent increase in reserves.  The Colombian government estimates the country currently has proven reserves for 6.6 years. 

Standard & Poor’s Launches Unique Index for Colombia

Standard & Poor’s announced the creation of a unique stock index for those investing in Colombia.  The S&P Colombia Select Index will provide investors information on the performance of Colombia’s largest companies.  Stocks included will have a market value of at least USD 200 million.  Eighteen companies comply with the requirements for inclusion in the index, including Avianca, Exito, PFBancolombia, Ecopetrol, and Isagen.  Minister of Finance Mauricio Cardenas stated that Colombia has become the focus for regional investment.

Colombian Government Seeks to Make Magdalena River Navigable

The Colombian government wants to make the country’s largest river – the Magdalena – navigable and has opened a bidding process for the concession.  Once the project is complete, the river would have a depth of seven feet and could transport convoys of up to 7,200 tons (the equivalent of about 234 trucks).  Infrastructure and investment firms from Spain, Belgium, Brazil, the Netherlands, and Colombia have been prequalified to bid.  The Colombian government will announce the concession winner on July 25, 2014.      

Additional information regarding this process can be found at:




Central Bank Raises Interest Rate

After 12 months with a stable interest rate of 3.25 percent, the Colombian Central Bank increased the rate by 25 basis points to 3.5 percent; a decision that surprised many. According to the Minister of Finance, who is also a member of the Central Bank’s board of directors, the rate increase reflects the strength of the Colombian economy.  Some critics argue the interest rate was raised before global and domestic conditions merit it.

Colombian Government Reaches Agreement with Indigenous Community to Repair the Caño Limón–Coveñas Oil Pipeline

The Colombian government and the U’wa indigenous community reached an agreement that will allow repairs to one section of the Caño Limón-Coveñas pipeline damaged in March.  Operations have been suspended for five weeks after illegal armed groups bombed a portion of the pipeline and the U’wa community would not allow operators to access the area to repair damages.  While three other sections of the pipeline also require repair, the Ministry of Energy is optimistic the line will be functional in a week or so.  According to the agreement with the U’wa, the Colombian national oil company Ecopetrol will suspend gas exploration activities in Toledo, Norte de Santander – an area near the community’s lands – for one month and the government will expedite the titling process for the community’s territory.  The halt in production resulted in government lossesof USD 8 million per day. 

Unemployment Continues to Decrease

The national unemployment rate fell to 9.7 percent in March 2014 compared to 10.2 percent during the same month of 2013.  The unemployed population decreased to 2.24 million Colombians.  The Minister of Finance underscored that this is the first time in 14 years that the rate for March reached single digits.


Production Halted at Colombia’s Caño Limón–Coveñas Oil Pipeline

On March 25, illegal armed groups bombed a portion of Colombia’s Caño Limón–Coveñas oil pipeline in Norte de Santander department.  The pipeline is 770 kilometers long, connects Colombia’s Venezuela border in Arauca department to Sucre department on the Caribbean cost, and transports about 80,000 barrels-per-day of oil.  The Caño Limón–Coveñas pipeline, owned by Ecopetrol, has suffered more than one thousand attacks in its almost 30-year history.   The U’wa indigenous community, located in the area where the attack occurred, has not allowed operators to access the area to repair damages.  The U’wa first wants to share its views with the government on oil extraction in its community.  Colombia has lost approximately 2.2 million barrels in oil production worth USD 220 million due to the month-long halt, according to the Ministry of Mines and Energy.  Government representatives are scheduled to meet with U’wa community members to discuss the issue.

Colombian Central Bank Reinforces Efforts to Stabilize the Exchange Rate

The Colombian Central Bank will increase its daily purchase of dollars from USD 10 million to USD 20 million in an attempt to stabilize the exchange rate.  The Colombian peso experienced a depreciation of almost 7 percent from January to mid-March 2014.  The Colombian government has stated that an exchange rate of approximately 2,000 Colombian pesos per dollar is the ideal level needed to make its exports more competitive.  The April 25 exchange rate reached 1,936 Colombian pesos per dollar.