WEEKLY REVIEW OF THE COLOMBIAN ECONOMY October 21 – 25

Colombian Imports and Exports Fell in the First Eight Months of 2013

As reported by the Colombian National Statistics Department, DANE, Colombian imports from January to August totaled USD $37 billion, which was a 1.6% decrease in comparison to the same period last year.  From January to August, Colombian exports totaled USD $38.9 billion, which was a 3.6% decrease compared to the same period last year.  This means that Colombia had a commercial surplus of USD $1.8 billion in the first eight months of 2013.  Colombian’s largest trade partners during this time, in order, were the United States, China and Mexico.

Colombia Presents Road Map to Enter the OECD

On October 25th, Secretary General of the OECD Jose Angel Gurria and Colombian President Juan Manuel Santos presented the road map for Colombia’s accession to the OECD.  The current Presidential Advisor and future Colombian representative to the OECD in Paris, Catalina Crane, believes that the process will take approximately three years.  To be accepted into OECD, Colombia will need unanimous approval from the organization’s 23 thematic committees.

Bruce Mac Master Elected as New President of ANDI

Bruce Mac Master was elected as president of the Colombian Industry Association (ANDI), Colombia’s most important private sector organization.  He is the former head of the Department of Social Prosperity in the Santos administration and a well-known economist.  Mr. Mac Master is replacing Luis Carlos Villegas, who resigned after 17 years to become the new Colombian ambassador to the United States.

WEEKLY REVIEW OF THE COLOMBIAN ECONOMY October 14 – 18

Colombian Congress Approves 2014 Budget

Colombia’s congress approved the 2014 national budget at approximately USD 108 billion, a 7.3 percent increase over the 2013 budget.  The government increased its initial budget proposal by 2 percent in response to demands stemming from recent strikes, such as requests for financial assistance from several agricultural sectors.  The budget increase will be funded by deferring the planned elimination of a financial transaction tax that charges 2 cents for every 50 cents involved in any financial transaction.  The budget is based on a fiscal deficit target of 2.3 percent of GDP.

Industrial Activity Decreased 1.2% in the First Eight Months of 2013

According to an Industrial Opinion Survey conducted by the National Business Association of Colombia (ANDI), industrial activity decreased 1.2% during the first eight months of the year.  The following industrial sectors had the largest declines in production: textiles (22.8%), auto parts (21%), and vehicles (4.3%).  Businesses view low demand, the strong peso, the cost and supply of raw materials, and infrastructure and logistics costs as the biggest obstacles to increased production.

FDI Decreased 0.92 Percent for First Nine Months of 2013

According to the Colombian Central Bank, foreign direct investment (FDI) into Colombia for the first 9 months of the year totaled USD 2.7 billion, a 9.2 percent decrease over the same period in 2012.  The decline can be attributed to lower oil and mining investments, which decreased 1.1 percent.  2012 FDI into Colombia totaled USD 16.7 billion, which the Central Bank believes will not be matched in 2013 due to a weaker international economy and lower commodity prices.

WEEKLY REVIEW OF THE COLOMBIAN ECONOMY October 7 – 10

Exports Grew 8.9% in August

According to the Colombian National Statistics Department, DANE, Colombian exports totaled US $4.97 billion in August, an 8.9% increase over August 2012.  This increase was mainly due to a 28% year-on-year growth in exports of products from the oil and mining sectors.  In the same period, industrial exports decreased 17.4%.  The United States continues to be the top importer of Colombian goods, receiving 34% of total Colombian exports from January to August 2013.

FDI in Colombia Grows but Lags Regional Average

In the second quarter of 2013, FDI into Colombia totaled US $4.5 billion, bringing FDI for the first half of 2013 to US $8.2 billion.  This represents a 5.2% increase year-on-year.  Over the same time period, total FDI into Latin America grew 6%, totaling US $102.9 billion.  The largest recipients of FDI were:  Brazil (US $39 billion), Mexico (US $23 billion) and Chile (US $10 billion).

 Inflation in September 0.29%

The 0.29% inflation rate was stable compared to September 2012.  The accumulated inflation rate for the first nine months of 2013 is 2.16%, which is consistent with the Colombian Central Bank’s projected inflation for 2013 of 2 to 4 percent.  The sectors that presented the highest price increases in September were housing (0.40%) and food (0.38%).  

WEEKLY REVIEW OF THE COLOMBIAN ECONOMY September 30 – October 4

Improvement on Social Indicators

In addition to measuring the multidimensional poverty rate, the Colombian Government is now also measuring semiannually the monetary poverty rate (calculates those living below an absolute standard of what households should be able to count on to meet their basic needs.  The GOC used a monthly income of less than COP 817,000 pesos – or about USD $ 408 for a family of four).  For the period July 2012 – June 2013, the monetary poverty rate decreased to 32.2% from 32.9% the year before.  For the period ending in June 2013 the extreme poverty rate reached 10.1%.   The GOC also announced that the unemployment rate for August 2013 decreased to 9.3% from 9.7% in August 2012.

 Colombia is the Second Biggest Flower Exporter

As a result of the implementation of the free trade agreements with the U.S., Canada and the European Union, Colombian flower exporters have been able to increase their exports.  During the first semester of 2013, Colombian flowers exports totaled USD $740 million – a 9% increase over the same period of 2012.  With these results Colombia consolidates itself as the world’s second biggest flower exporter with more of the 15% of the global flower market.  President Santos stated this week, “We are the leading exporter of carnations and the second largest exporter of flowers in the world, surpassed only by the Netherlands”.

 Colombian External Debt Totaled USD $ 83.8 billion

According to the Central Bank, Colombia’s external debt through June 2013 totaled USD $83.8 billion (USD $37.3 billion in private sector debt and USD $46.5 billion in public sector debt).  This figure represents 21.6% of the country’s GDP, and a10% increase over external debt in June 2012.