WEEKLY REVIEW OF THE COLOMBIAN ECONOMY May 13 – 17
Colombia – United States FTA Turns 1 Year Old
The U.S. – Colombia Free Trade Agreement (FTA) turned 1 year old on May 15. There were numerous events to commemorate the date including the visit by the Acting Secretary of Commerce, Dr. Rebecca Blank, leading an infrastructure mission of 20 U.S. companies. President Santos celebrated the FTA’s first birthday in Cartagena, where he had welcomed the FTA’s entry into force with the first shipment of Colombian products the year before. Over 114,000 containers passed through the Cartagena Port since the FTA entered into force – over 5,000 containers more than the previous year. U.S. exports to Colombia have increased 20% from May 15, 2012 through February 2013 relative to 2011.
Colombia Third Destination of FDI in Latin America
According to the United Nations Economic Commission for Latin America and the Caribbean, ECLAC, Colombia ranked third in the region last year as an FDI destination, attracting US$15.8 billion. Brazil was the principal destination with US$ 65.2 billion and Chile ranked second with US$ 30.2 billion.
Coal Production Declined
During the 1Q of the year, coal production in Colombia declined to 18.4 million tons, or 21.4% less than during the same period of the previous year.
For complete information please visit – http://bit.ly/107EIOS
WEEKLY REVIEW OF THE COLOMBIAN ECONOMY April 22 – 26
S&P Raises Colombian Credit Rating
Standard & Poor’s upgraded Colombia’s sovereign credit rating to BBB from BBB minus, with a stable outlook. S&P noted that a strong financial profile, growing domestic capital markets, and favorable long-term GDP growth expectations have strengthened Colombia’s creditworthiness.
Mexico to Join the MILA Market
The Mexican government is proposing financial reforms that include changes needed to become a member of the Latin American Integrated Market (MILA in Spanish). The stock markets of Peru, Chile, and Colombia are already integrated in the MILA, with the participation of more than 500 companies. Mexico’s announcement is an additional step in the Pacific Alliance’s integration strategy.
Fist Road Concession Projects Receive Proposals
The Colombian National Infrastructure Agency has received 32 proposals for the first two projects opened for bids as part of the country’s new road concessions. The two projects are the roads between Girardot-Puerto Salgar and Mulalo-Loboguerrero for a combined value of US$ 3 billion dollars. Companies from Spain, Italy, Brazil, France, Mexico, Austria, and China have submitted proposals.
For complete information please visit – http://bit.ly/Y2sPvM
WEEKLY REVIEW OF THE COLOMBIAN ECONOMY April 15 – 19
Colombian Government Introduces Economic Stimulus Plan
President Santos announced April 16 new measures aimed at boosting economic growth and slowing peso appreciation. Under its US$ 2.74 billion “Support Plan for Productivity and Employment (PIPE),” the GOC hopes to achieve 4.8% GDP growth this year. Among the most important measures are: an exchange rate target of 1,900 Colombian pesos per dollar (the current exchange rate is 1,825 pesos per dollar); employer payroll tax reductions; increased infrastructure investment; interest rate reductions from 12.5% to 7% for mortgages on new houses; and the hiring of 2,500 new policemen.
Colombian Poverty Rate Fell to 32.7% in 2012
According to the Colombian National Statistics Department, the poverty rate for 2012 decreased to 32.7% from 34.1% in 2011. Poverty in urban areas dropped from 30.3% to 28.4%. However, poverty in rural areas rose from 46.1% to 46.8%. Extreme poverty decreased 0.2% to 10.4%. Press reported President Santos’s statement that some 1.7 million people had been lifted out of poverty during his administration.
Colombian Companies on Forbes 2,000 Biggest Companies List
Five Colombian companies were included among the top 2,000 biggest companies ranked by Forbes Magazine in 2013. Due to the good performance of the Colombian stock exchange, all five companies climbed positions in this year’s ranking. The five companies included are: Ecopetrol (oil); Bancolombia (banking); Grupo Aval (banking); Davivienda (banking); and Argos (cement). Rankings range from 114 (Ecopetrol) to 1,594 (Argos).
For complete information please visit – http://bit.ly/XLBbrj
WEEKLY REVIEW OF THE COLOMBIAN ECONOMY April 8 – 12
Colombia 66th of 144 Countries in Technology Development
According to the World Economic Forum’s 2013 Global Information Technology Report, Colombia climbed from 73rd to 66th among 144 countries on the Networked Readiness Index.
Magic Realism
Proexport, the Colombian export and investment promotion agency, launched its new campaign to attract foreign tourists to Colombia. The goal is to double the number of visitors by 2014 to four million, which will generate an estimated US$4 billion in revenue.
Inflation for March 0.21%
Inflation for the first quarter of this year came in at 0.95%. The Colombian Central Bank’s inflation target for 2013 is 3 percent. The three sectors with the highest price increases during March were: communications (1.85%), health (0.67%) and transportation (0.54%).
For complete information please visit – http://bit.ly/ZQO4Ux
WEEKLY REVIEW OF THE COLOMBIAN ECONOMY April 1 – 5
2012 FDI into Colombia Totaled US $15.8 Billion
According to the Ministry of Trade, Foreign Direct Investment (FDI) flow into Co-lombia reached a record high of US $15.8 billion in 2012. This figure represents an increase of 17.8% over 2011 FDI. FDI in industry totaled US $2 billion, a growth of 159%, while FDI in non oil or mining sectors totaled US $8.12 billion.
Central Bank Cuts Interest Rate to Boost Economic Activity
The Colombian Central Bank reduced its interest rate to 3.25%, the fifth con-secutive decrease since July 2012, bringing the current rate to its lowest level since February 2005. The Bank’s board of directors made the decision in an at-tempt to boost economic activity in response to the Colombian economy’s levels of growth, which are currently below the country’s economic potential.
Colombia’s 2012 Foreign Debt Grew 3.6%
Although Colombia’s foreign debt grew 3.6% in 2012, the increase was consid-erably lower than in 2011 (17.2%) and 2010 (20.5%). Private and public foreign debt in 2012 grew by US $2.7 billion.
For complete information please visit – http://bit.ly/10ARDL2
WEEKLY REVIEW OF THE COLOMBIAN ECONOMY March 18 – 22
Colombian Economy Grew 4% in 2012
The Colombian National Statistics Department (DANE) announced that the country’s GDP growth rate for 2012 was 4%. This result surprised many, as the Ministry of Finance had projected a growth of 3.8%. The sectors that led the growth were mining (5.9%), financial services (5.5%), commerce (4.1%), and transportation (4%). Meanwhile, industry (-0.7%) and agriculture (2.6%) had the poorest performances.
Post-FTA Trade Missions Indicate Increased Interest
Since the FTA between Colombia and the U.S. entered into force on May 15, 2012, 13 trade missions from the U.S. have visited Colombia, highlighting an increased interest among U.S. companies in the Colombian market . The trade missions have focused on a range of issues such as private equity and franchises and have represented states such as Florida, Massachusetts, and North Dakota.
For complete information please visit – http://bit.ly/165RFwN
The Ambassador’s Infrastructure Webinar: If You Missed It, Here’s the Recording
For those who weren’t able to join us for the U.S. Ambassador’s webinar on Tuesday about investment and trade opportunities related to Colombian infrastructure, please click the following link for a recording of the presentation, including both audio and the PowerPoint slides: http://conx.adobeconnect.com/p2azn3u3y9g/.
If you would like to download the slides, including the presentation by guest speaker Dr. Luis Andrade, President of Colombia’s National Infrastructure Agency (ANI), please click here: http://bit.ly/WZxdx8
WEEKLY REVIEW OF THE COLOMBIAN ECONOMY March 11 – 15
Colombia Opens Bid Process on 4G Communication Services
The Government of Colombia announced April 16 as the deadline for compa-nies to submit applications to participate in the bid process on licenses to pro-vide 4G (seven licenses) and 3G (one license) services in the country. Bidding rules and technical specifications were published on March 11. Additional information is available at the following web site: http://bit.ly/SA0SJ9.
Colombia’s Trade Agenda with the Pacific Alliance
Colombia will assume the Pro Tempore Presidency of the Pacific Alliance dur-ing the Alliance’s presidential summit on May 23 in Cali. Colombia has been courting possible future member countries Costa Rica and Panama. Colom-bia and Panama resumed bilateral Free Trade Agreement (FTA) negotiations this week and Colombia concluded FTA negotiations with Costa Rica on March 8.
Cites: USA and Colombia Back Protecting Sharks
In support of a proposal co-sponsored by the United States and Colombia, CITES (Convention on International Trade in Endangered Species of Wild Fauna and Flora) parties voted to include the oceanic whitetip shark on a protected list (Appendix II). The CITES Appendix II list requires permits to ensure exports are sustainable and legal.
For complete information please visit – http://bit.ly/ZbKFID
First Seven Months of the U.S. – Colombia FTA
Win-Win Trade from June through December of 2012:
- U.S. exports to Colombia totaled $10 billion, a 17.6% increase over the same period in 2011.
- U.S. imports from Colombia totaled $13.7 billion, a 1.3 % decrease compared to 2011 (Many Colombian exports already benefited from ATPDEA preferences prior to the FTA and the U.S. economy contracted the last three months of 2012).
- Colombia was the fourth most significant destination of U.S. exports in Latin America.
- The U.S. remained the primary destination of Colombian exports.
For complete information please visit – http://bit.ly/WE6nur
WEEKLY REVIEW OF THE COLOMBIAN ECONOMY March 4 – 8
Fitch Revises Colombia’s Outlook to Positive
The international ratings company upgraded its outlook for the Colombian economy from stable to positive. The country’s current BBB- rating is the lowest level for an investment grade status, but the improved outlook opens the door for a future rating upgrade.
Cerrejon Labor Strike Ends
Cerrejon, Colombia’s largest coal producer, reached an agreement with workers ending a 29-day labor strike that resulted in company losses of approximately 60 million dollars.
Inflation for February 0.44
According to Colombia’s National Statistics Department, the monthly inflation rate for February was 0.44%, which is the lowest rate for the last five years. The Colombian government inflation goal for 2013 is 3%.
Five Colombian Billionaires on Forbes Most Wealthy List
Colombia has five billionaires in Forbes’ recently released 2013 ranking of the world’s richest people. In order: Luis Carlos Sarmiento Angulo (64th – Banking), Alejandro Santo Domingo (82nd – Diversified Investments), Carlos Ardila Lulle (225th – Beverages), Jaime Gilinski (613th – Banking), and Woods Staton (1,268th – Restaurants).
Colombia and Costa Rica Conclude FTA Negotiations
The two countries successfully concluded negotiations for an FTA and plan to sign the official document May 23 during the next Pacific Alliance meeting in Cali. The agreement is expected to enter into force in 2014 or 2015 and will immediately eliminate duties on 75 percent of industrial products and 60 percent of agricultural products.
For complete information please visit – http://bit.ly/Y4EtFT
