Colombia: Exports likely to pick up as diplomatic rift with Venezuela is drawing to an end
October 5, 2010
In September, exports grew 15.0% over the same month last year to reach USD 3.2 billion. The pace was slower than the 22.3% expansion registered in August. The September reading mainly reflected a deterioration in overseas sales to the country's main trade partners, with exports to the United States falling 7.5% over the same month last year. Moreover, sales to Venezuela, historically one of the country's major trading partners, contracted 69.2% year-on-year, as the diplomatic difficulties between the two countries have prompted Venezuela to mandate import quotas on several important export groups. However, following Colombia's presidential transition in August, the relations between the two countries have improved notably. In early November, President Juan Manuel Santos and his Venezuelan counterpart Hugo Chavez signed a number of agreements that promise to put an end to the diplomatic rift and discussed a number of bilateral agreements in the areas of textiles, agricultural and meat production, energy, housing construction, automobile manufacturing, tourism and infrastructure. As a result of the September reading, the moving three-month sum of exports reached USD 9.6 billion, which is still below the pre-crisis peak of 10.8 billion registered in July 2008. Meanwhile, in August, the latest date for which data are available, imports grew 41.9% year-on-year (July: +8.2% yoy). As a result, the trade balance deteriorated, with the deficit rising from USD 283 million recorded in July to a USD 336 million deficit in August.