2013 Inflation Rate 1.94%

According to the National Statistics Department, Colombia’s 2013 inflation rate was 1.94 percent, 0.50 percentage points lower than the 2012 rate.  Colombia’s 2013 inflation rate was the lowest in more than fifty years.  Four sectors were above the national average: healthcare (4.44%), education (4.37%), communications (2.75%), and housing (2.74%).

Unemployment Rate for November 2013 8.5%

At 8.5 percent, the November 2013 unemployment rate was 0.7 percentage points lower than the 9.2 percent registered for November 2012.  November 2013 marked the seventh consecutive month with an unemployment rate of one digit.  There were 1,990,000 people unemployed in Colombia as of that month.

Minimum Wage Increase for 2014

The Colombia government, private sector, and labor unions agreed on a 4.5 percent minimum wage increase for 2014.  The current monthly minimum wage is approximately USD 325, reflecting an increase of USD 14 over the 2013 wage.  The Colombian government estimates that almost 1,300,000 Colombians earn the minimum wage.

Colombian Exports Grew by 2.6% in November 2013

In November 2013, Colombian exports increased 2.6 percent from USD 4.8 million to USD 4.9 million compared to the same month in 2012.  The growth of exports was mainly due to an 11.5 percent increase in the extractive commodities and a 3.6 percent increase in agricultural products.

Colombian Coffee Production Up 41% in 2013

Colombian coffee production rose 41 percent in 2013 in comparison with the previous year, the highest annual growth in the past 36 years.  According to the National Coffee Federation, Colombia has now regained its spot as the third largest coffee producer in the world.

Colombia Reached Record FDI Flows in 2013

Colombia received a record USD 16.8 billion in Foreign Direct Investment in 2013, an increase of 7 percent compared to 2012, according to preliminary estimates by the Colombian Central Bank.  The extractive industries continued to lead the pack.  Hydrocarbons and mining received USD 13.3 billion in FDI, which amounted to 81.6 percent of the 2013 total.


Colombia’s 3Q GDP Growth at 5.1%

The Colombian economy grew 5.1% during 3Q 2013 compared to the same period in 2012.  The construction sector led growth for the quarter at 21.3% followed by agriculture with 6.6%.  Industry lagged behind with a negative growth of 1% during the period.  Colombia’s 3Q growth rate was almost four times Mexico’s (1.3%) and exceeded the growth rate for both Chile (4.7%) and Peru (4.4%).  Colombia’s cumulative GDP growth from January to September 2013 totaled 3.9%.

Colombia Publishes Technical Regulations for Unconventional Resources

Colombia’s Ministry of Mines and Energy published the technical regulations that will govern exploration and production of the country’s unconventional oil and gas resources.  According to Minister of Mines and Energy Amylkar Acosta, the development of unconventional resources is crucial in Colombia’s effort to increase its current oil reserves, which stood at approximately 2.38 billion barrels at the end of 2012 or enough for 6.9 years.  Colombia hopes to raise USD 2.6 billion in its planned 2014 bid round, which will include blocks for unconventional, conventional, and offshore resources, coal bed methane, and reserves that have not yet been developed.

FTAs Open Doors for U.S. Insurance Companies in Colombia

The Colombian Ministry of Finance issued Decree 2838, which outlines the requirements for foreign insurance companies operating in Colombia.  Measures to liberalize financial services are a requirement under several FTAs that Colombia has recently signed.  According to the decree, foreign companies can comply with the same regulations that control the operation of local insurance companies.  Prior to Decree 2838, foreign insurance companies had to establish a subsidiary to operate in Colombia, but can now operate in the country simply by opening local branches.


Fitch Upgrades Colombia’s Debt Rating

On December 10, Fitch upgraded Colombia’s debt rating to BBB from its previous BBB- rating and granted the country a stable outlook, noting that the environment for economic growth over the medium term remains favorable.  Fitch highlighted Colombia’s positive debt dynamics and the performance of its external accounts as reasons for the upgrade.  Fitch’s rating is now consistent with Standard & Poor’s, while Moody’s Investors Service rates Colombia one step down at Baa3 with a positive outlook.  All three agencies rate Colombia investment grade.

Ecopetrol Plans to Boost Production

Ecopetrol, Colombia’s majority state-owned oil company, announced that two areas under exploration in Colombia’s eastern department of Meta are commercially viable. The Akacias block, owned in partnership with Canadian oil company Talisman, is estimated to have 35 million barrels of proven reserves.  The Caño Sur Este block, owned entirely by Ecopetrol, has proven reserves of 22.5 million barrels. With these findings, Ecopetrol expects to produce an extra 50,000 barrels of oil per day (bpd) by 2016.  Industry and government have been focused on increasing Colombia’s oil reserves, which stood at approximately 2.38 billion barrels at the end of 2012 or enough for 6.9 years, and Ecopetrol’s discoveries help in this regard.

FDI into Colombia Shows Increase

According to the Colombian Central Bank, FDI into Colombia totaled USD 8 billion for the first half of 2013.  This figure represents an increase of 2.9% over the same period of 2012.  The United States had the highest levels of FDI into Colombia with USD 1.4 billion, followed by Panama (USD 1.1 billion), Switzerland (USD 1 billion), and England (USD 774 million).


President Santos Visited President Obama

On December 3rd, President Juan Manuel Santos met President Barack Obama during his visit to Washington D.C. to strengthen ties between the two allies.  Their meeting was notable in that it focused primarily on non-security issues, such as economic growth, trade, education, and regional energy.  During President Santos’ visit, Colombian Vice Minister of Energy Orlando Cabrales and U.S. Deputy Energy Secretary Daniel Poneman signed a memorandum of understanding between the two governments to enhance close cooperation on energy regulation, technology, and regional integration.

Mild Deflation in November, -0.22%

This month Colombia experienced mild deflation of 0.22%, which made average inflation to date for 2013 a modest 1.67%.  This is below the Central Bank’s projected 2013 inflation rate of 2% to 4%.  Food prices had the largest drop, falling by 0.53%.


Colombian Foreign Debt at USD 85.6 billion

According to the Central Bank, Colombia’s foreign debt at the end of August was USD 85.6 billion, an increase of 10.21% compared to August 2012.  The total foreign debt was divided in: public debt that accounted for USD 46.7 billion, equivalent to 12.4% of GDP, and private debt that accounted for USD 38.9 billion, representing 10.3% of GDP.

Bogota Mass Transport Opportunity

October 25, 2013, Luis Alberto Moreno (from BID- Banco Interamericano de Desarollo, a.k.a. Interamerican Development Bank)), Gustavo Petro (Bogota Mayor), and Andres Forero Linares (Manager of Transmilenio System) announced the launch of the “Policy of Clean Mobility of Integrated Public Transport System” (SITP), by inaugurating the Corredor Verde (green corridor) where new Euro 4 Volvo diesel engine buses were being Introduced into the city mass transport system.

This project is Bogota’s first step in building the new SITP, where the implementation of electrified corridors and zero or near zero emissions buses/trolleybuses will be implemented, depending on the operators. It involves the systematic renovation of over 13,000 buses, along with improvements and inclusion of GPS technology, formal hiring conditions for drivers and integration of payment collection systems. Currently, Bogota’s Public Transport scheme boasts a fleet of roughly 15,600 buses; however, the implementation of the new SITP will decrease these fleet requiring only 13,332 buses for its operation. Although the System initially will incorporate the existing buses, it is estimated that there will be a renewal of 9,000 buses in the coming two years, according to the new bus specifications.

The SITP will be complemented with a light rail system (currently under feasibility studies), which will bring passengers from the surrounding areas of Bogota as well as the use of cable cars/gondola lifts in Bogota’s zones of San Cristobal and Ciudad Bolivar. The tender for the gondolas will be ready for Q2 of 2014, at an estimated cost of USD150 million per line. A metro system is also planned, with an estimated cost of USD160 million per mile built, with a total of 17 miles.

 Opportunities for U.S. Companies

Various opportunities for American companies have been identified by Commercial Service Bogota, Colombia, especially in the financing of these projects, which have a total cost of over USD 3 billion. In terms of construction opportunities, American companies should find associations/partnerships with local construction companies who will be bidding on these projects and provide them with services as contractors. Opportunities can range from providing geo- engineering services, to material sourcing, to heavy machinery rental. The opportunities exist, and the most practical way to enter this new market (which will be investing over USD26 billion in road infrastructure over the next 5 years) is by partnering with a local player. 

For complete information, including bus models specifications requested by Transmilenio – please visit  http://bit.ly/1juo4oh


Transmilenio – Transmilenio Contract Plans in English.


For More Information please contact:

The U.S. Commercial Service in Bogota, Colombia can be contacted via e-mail at:  Camilo.gonzalez@trade.gov ; Phone: 57-1- 275-4575; or visit our website: http://export.gov/colombia/.


Colombian Government Tackles Bottlenecks for Projects

On November 22, President Santos signed a new law that seeks to expedite the process for developing infrastructure projects.  The law will allow infrastructure projects to move forward in areas with mining titles and provides new rules on the content and scope of environmental impact studies that must be submitted to authorities.  The government also issued Decree 2613 on November 20, which will attempt to strengthen interagency coordination on the prior consultation process with indigenous and Afro-Colombian communities.  Prior consultation with affected communities is required for the approval of infrastructure and other projects and more coordinated implementation could remove a potential bottleneck for the development of future projects.

Central Bank Sets Inflation Goal for 2014   

The Colombian Central Bank set the inflation target for 2014 at 3%.  The inflation rate through October 2013 was 1.89%.  The government expects to comply with its fiscal deficit goal of 2.4% for 2013.

Unemployment at its Lowest Point Since 2001

October’s unemployment rate was 7.8%, a decrease from the 8.9% seen in October 2012.  This is the sixth straight month with a one digit unemployment rate and the lowest of the past 12 years.  The cities with highest unemployment rates are Pereira (18.1%), Armenia (13.9%), and Cali (13.3%).



President Santos Runs for Re-election 

President Juan Manuel Santos announced he will seek a second term in Colombia’s May 2014 presidential elections.  Priorities during a second term will likely include continuing peace negotiations with the FARC, moving forward Colombia’s OECD accession, reducing unemployment, and improving internal infrastructure.  Independent studies have concluded that a peace agreement with the FARC could increase Colombia’s GDP growth by 1%.  According to Minister of Finance Cardenas, 4G infrastructure projects could improve Colombia’s competitiveness and increase GDP growth by 1.5%.

Industrial Production Fell 1.8% in September

Industrial production in September 2013 fell 1.8% compared to September 2012.  The auto industry showed the greatest decrease.  In the first 9 months of the year, industrial production fell 2.7% compared to the same period in 2012.  In March 2013, President Santos announced measures to address this economic challenge, including the availability of special financing for industry.

Colombian Imports Increase 10% in September

In September 2013, Colombian imports totaled USD 5.1 billion, a 10% increase compared to September 2012.  Manufacturing accounted for 73.6% of total imports, fuel and extractive industry products for 16.7%, and agricultural products, food, and beverages for 9.6%.  


Colombian Exports Decrease 1.2% in September

In September 2013, Colombian exports totaled USD 4.8 billion, a 1.2% decrease compared to September 2012.  A 50.5% decrease in gold exports during the period could partially explain the reduction, although the extractive sector overall had the greatest increase in exports at 3.1%.  The United States was the main destination for Colombian exports with a 33.6% share of the total volume, followed by China (7.9%), Panama (5.3%), India (4.8%), Spain (4.7%), and the Netherlands (3.9%).

Colombia’s Domestic Air Travel Takes Off

A total of 21.1 million passengers flew domestically in Colombia from January to September 2013, a 19.6% increase compared to the same period in 2012.  Bogota continued to have the highest volume of passengers (18 million), but major cities such as Medellin,Cartagena, Cali and Barranquilla showed the largest gainss.  An increase in flights offered by budget airlines such as Viva Colombia and Easy Fly may explain the higher volume.  Avianca remains the principal domestic carrier with 55% of total passengers in the local market.

 Colombian Government Boosts Investment in Agriculture for 2014

The Colombian government will invest approximately USD 2.5 billion in the agricultural sector in 2014, an increase from the planned USD 1.7 billion.  A recently-extended tax on financial transactions will provide 80% of the budget.  The increased investment is largely due to demands stemming from recent strikes, such as requests for financial assistance from several agricultural sectors.  The government will host a National Agricultural Pact meeting in December with agricultural associations and farmers to discuss how to manage the budget for 2014.  Goals include increasing the sector’s competitiveness and reducing the rural poverty rate of 50%. 

The first business roundtable of the Grupo Energia de Bogota

Grupo de Energía de Bogotá, a multinational corporation in the power sector, is one of the main electric power corporations in Colombia and in the region.  It has focused on a Global Responsibility growth model, which supports sustainable development in its markets, and was ratified in 2013 as one of the companies included in the Dow Jones Sustainability Index.

The Group will carry out its first business roundtable among its member companies, affiliates, and supply chain providers.  This business roundtable seeks to drive business opportunities and facilitate new linkages among its member companies as well as current and potential supply chain providers.  The meeting will be on November 25th 2013 through the Group’s web platform www.ruedagrupoenergiadebogota.com and is an opportunity for companies interested in becoming supply chain providers or affiliates of the Group, particularly in the sectors of power generation, power transmission and distribution, and  natural gas distribution.


Agenda and enrolment adviser: Juliana Martheyn – Cel: 57-3115391937




Peace and the Economy

Colombian Minister of Finance Mauricio Cardenas stated this week that the Colombian economy is expected to grow approximately 4.5% this year, led by the construction, services, coffee, and hydrocarbon sectors.  According to Minister Cardenas, pending infrastructure improvements and a possible negotiated peace agreement with the FARC could allow the economy to grow at more than 6% per year.  The Colombian government has started its fourth generation road concession program with 47 projects requiring investments of approximately USD 25 billion.  The peace process with the FARC is currently ongoing in Havana, Cuba, and agreements have been reached on two of the five agenda items.

Avianca Debuts on Wall Street

Avianca, Colombia’s national airline, debuted this week on the New York Stock Exchange, selling USD 408.5 million in shares through 27.2 million American depositary receipts.  The company will use these funds to finance its regional expansion and the acquisition of 98 new airplanes to add to its existing fleet of 130 planes.  Only nine years ago the company was battling bankruptcy in New York’s south district court.  Brazilian businessman German Efromovich acquired and restructured the company in 2004, turning it into a Multilatina with hubs in San Salvador, Lima, and Bogota.  Avianca expanded its presence with the acquisition of El Salvador-based TACA Airlines in 2010 and Ecuador-based Aerogal Airlines in 2011.

Inflation in October -0.26%

October’s overall inflation rate was -0.26%, with housing (0.15%), health (0.09%), and apparel (0.07%) showing the greatest price increases.  For the first 10 months of 2013, the accumulated inflation rate reached 1.89%.  Jose Dario Uribe, Chairman of the Colombian Central Bank, stated this week that the inflation rate for 2013 will likely be around 2.4%.


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