Economic trends
After two consecutive years of a growth rate higher than 6%, Colombia's economy had to endure the effects of the global economic crisis (collapse in prices of export products, reduction of the American demand) and recorded a growth of 1.5% in 2009. However, the growth revived vigorously in 2010 (4.3%) supported by the increase on public expenses favoring investment and consumption.
The authorities have taken measures to preserve the public finances (in a chronic deficit), mainly by imposing restrictions in issuing bank credits and by keeping the stability of the macro-economic indicators. The new government of president Santos has launched an ambitious program of reforms aiming to reinforce taxes, to improve the management of territorial income drawn by royalties, to increase competitiveness and to control the Peso appreciation. The fight against poverty and the development of real estate are also part of the priorities.
Under the effect of the crisis, the unemployment rate reached 12% of the active population. This still represents a drop of almost 50% of the number of job seekers in the country over the past ten years. More than half of the Colombian people continue to work in the informal sector. The purchasing power of Colombians has decreased, the rise in the cost of living is around 7.5%. The poverty level remains high (45%), inequalities are strong and despite the retreat of the guerrillas, the internal conflict persists, which was the origin of the expatriation of more than 3 million persons.
Main branches of industry
Agriculture represents 8.5% of the GDP and employs more than 18% of the active population. Due to the climate and the topography of the country, agriculture is extensive and very varied, and contributes to 75% of the export revenues. Colombia's main crops are coffee, bananas, cut flowers, cotton, sugarcane, livestock, rice and corn. The cultivated lands hardly take up 8% of the country's total surface area. Colombia has also many natural resources such as coal, oil, natural gas, iron ore, nickel and gold.
Industry represents around 36% of the GDP and employs nearly 20% of the population. Colombia's main industries are textile, chemical products, metallurgy, cement, cardboard containers, plastic resins and beverages.
Colombia's main economic sector is the services sector, which represents more than 55% of the GDP and employs nearly 60% of the active population.
International trade
Colombia's foreign trade represents about one third of the GDP. Colombia has signed trade agreements with Chile, the CAN countries (Andean Community), MERCOSUR countries, Central American and Caribbean countries, and the European Union. It has also signed free trade treaties with Chile, Guatemala, Honduras, El Salvador, Canada, Mexico, Switzerland, Norway, Iceland, Liechtenstein and the United States.
The country mainly exports oil, coal, coffee, flowers, textile products, ferronickel, bananas and chemical products. Its main clients are the United States, Venezuela and the Netherlands. Imports are constituted mainly of machinery and equipment, grains, chemical products, transport equipment, electric and electronic equipment. Colombia's main suppliers are the United States, China, Mexico and Brazil. Colombia's trade balance has seen its surplus increase in 2010. The political tensions with Venezuela, who penalizes Colombian exports, could always play a negative role in this balance surplus.
© Export Entreprises SA, all rights reserved.
Last updates: February 2012
