Colombia Economic Forecast

Colombia Economic Outlook

January 18, 2022

Incoming data for Q4 suggests that conditions continued to improve, but at a slower pace. In October, economic activity expanded at the softest pace in eight months in annual terms, and manufacturing output growth also moderated from the prior month. Additionally, manufacturing business conditions improved at a slightly slower pace in Q4 compared to Q3. More positively, the unemployment rate dropped to a near two-year low in November, boding well for consumption. On 17 December, the World Bank approved a USD 300 million loan to strengthen the country’s resilience to climate change and health emergencies. In other news, effective from 1 January, the government increased the minimum wage by 10%—the largest rise in decades. The populist measure—announced five months before the presidential elections—could have implications for inflation, monetary policy and the pace of job creation.

Colombia Economic Growth

Economic growth is set to moderate markedly this year, although robust private and capital spending, as well as healthy exports, will sustain activity. Downside risks to the outlook remain, namely lingering uncertainty over the pandemic, weakened public finances, a still-loose labor market and uncertainty over the 29 May presidential elections. FocusEconomics panelists project GDP to grow 4.1% in 2022, which is unchanged from last month’s forecast. For 2023, panelists see GDP growth at 3.2%.

Colombia Economy Data

2015 2016 2017 2018 2019
Population (million)48.248.749.349.850.4
GDP per capita (USD)6,0755,8086,3226,6896,421
GDP (USD bn)293283312333324
Economic Growth (GDP, annual variation in %)3.02.11.42.53.3
Domestic Demand (annual variation in %)2.41.21.13.44.3
Consumption (annual variation in %)3.41.62.33.74.4
Investment (annual variation in %)2.4-2.91.91.54.3
Industrial Production (annual variation in %)2.04.1-0.53.81.5
Retail Sales (annual variation in %)6.42.0-0.15.48.1
Unemployment Rate8.99.29.49.710.5
Fiscal Balance (% of GDP)-3.0-4.0-3.6-3.1-2.5
Public Debt (% of GDP)42.943.844.948.247.2
Money (annual variation in %)12.56.97.15.08.7
Inflation Rate (CPI, annual variation in %, eop)6.85.74.13.23.8
Inflation Rate (CPI, annual variation in %)5.07.54.33.23.5
Inflation (PPI, annual variation in %)5.52.23.32.36.1
Policy Interest Rate (%)5.757.504.754.254.25
Stock Market (annual variation in %)-26.518.213.6-2.919.3
Exchange Rate (vs USD)3,1753,0022,9853,2483,287
Exchange Rate (vs USD, aop)2,7493,0522,9522,9583,283
Current Account (% of GDP)-6.3-4.3-3.3-3.9-4.2
Current Account Balance (USD bn)-18.6-12.0-10.2-13.1-13.7
Trade Balance (USD billion)-13.5-9.2-4.5-5.1-8.5
Exports (USD billion)38.634.139.844.442.4
Imports (USD billion)52.143.244.249.650.8
Exports (annual variation in %)-32.2-11.716.811.7-4.7
Imports (annual variation in %)-15.4-16.92.312.12.5
International Reserves (USD)46.746.747.648.453.2
External Debt (% of GDP)38.242.540.039.642.7

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Colombia Facts

Value Change Date
Bond Yield6.080.0 %Dec 30
Exchange Rate3,287-0.17 %Jan 01

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