Economic and Political Overview

flag Colombia Colombia: Economic and Political Overview

In this page: Economic Indicators | Foreign Trade in Figures | Sources of General Economic Information | Political Outline | COVID-19 Country Response

 

Economic Indicators

Thanks to its market size, the extent of its natural resources (coffee, emeralds, oil and coal, among others) and a historical reputation as an exemplary debtor, Colombia has experienced a stable and solid growth for most of the past two decades. Although the country was affected by the fall in oil prices due to the pandemic, Colombia was able to recover and, in 2022, the country recorded a GDP growth of an estimated 7.3%. Nevertheless, economic growth slowed substantially since late 2022, and consumer and business confidence remained relatively weak. Moreover, financial conditions tightened amidst a rising cost of credit and more stringent lending criteria. Private consumption, a key driver of the strong recovery from the pandemic, also weakened. Overall, the IMF estimated a GDP growth of only 1.4% in 2023. Driven by a rebound of investment fuelled by the relaxation of financial conditions, GDP growth is expected to accelerate to 2% this year and 2.9% in 2025 (IMF).

Fiscal consolidation has been underway, yet there are concerns regarding adherence to fiscal regulations. The projected budget deficits, comprising 4.3% of GDP in 2023, 4.5% in 2024, and 3.5% in 2025, hover just within the thresholds set by the fiscal rule. Nevertheless, primary expenditures for implementing the reform agenda in 2024 surpass initial estimates. Additionally, oil, customs, and tax revenues in 2023 fell short of projections. Furthermore, fiscal strategies account for cyclical and uncertain revenues, particularly the anticipated collection of tax arrears through litigation, amounting to nearly 1% of GDP in 2024 and 0.6% in 2025, as outlined by the fiscal council. Overall, the IMF estimated the budget deficit at 2.9% of GDP last year, with an expected 2.6% deficit in 2024. In 2023, gross debt decreased to 55% of GDP and, looking ahead, that rate is expected to slightly increase to 55.4% by 2025 (from around 50% before the pandemic). Inflation in Colombia has been high and persistent due to weather-related and supply shocks over the past two years, alongside currency depreciation in 2022-1H23. Additionally, widespread indexation, including utility rates, rents, and education costs, contributes to inflation stickiness. The overall rate was estimated at 11.4% in 2023 by the IMF, with a sharp decline expected this year (5.2%) and in 2025 (3.6%), still above the upper 3+/-1% band of the central bank's target.

One third of the Colombian population lives below the poverty line. Development policies for rural areas are a priority for the Colombian government. Unemployment rates, which increased during the pandemic, declined to 10.8% in 2023, and should continue decreasing in the coming years - reaching 10.4% in 2024 and 10% in 2025. It should be noted, though, that more than half of the Colombian population continues to work in the informal sector. Overall, inequalities are strong throughout the country: Colombia has a Gini coefficient of 51.5, one of the highest in Latin America.

 
Main Indicators 20222023 (E)2024 (E)2025 (E)2026 (E)
GDP (billions USD) 345.33363.62386.08400.48417.86
GDP (Constant Prices, Annual % Change) 7.30.61.12.53.0
GDP per Capita (USD) 6,6916,9727,3277,5257,777
General Government Balance (in % of GDP) -7.0-3.2-3.0-2.9-2.9
General Government Gross Debt (in % of GDP) 60.152.554.455.655.7
Inflation Rate (%) 10.211.76.43.63.0
Unemployment Rate (% of the Labour Force) 11.210.19.99.69.3
Current Account (billions USD) -21.37-9.72-11.70-13.28-14.12
Current Account (in % of GDP) -6.2-2.7-3.0-3.3-3.4

Source: IMF – World Economic Outlook Database , Latest available data

Note: (e) Estimated Data

Main Sectors of Industry

Natural resources are abundant in Colombia. The country has largest coal reserves in Latin America, and has the second largest hydroelectric potential in the continent, after Brazil. Colombia also has significant amounts of nickel, gold, silver, platinum, and emeralds, as well as large petroleum and natural gas reserves. Due to the climate and the topography of the country, agriculture is extensive and very diversified. Colombia's main crops are coffee, bananas, cut flowers, sugarcane, livestock, rice and corn. However, the share of agriculture in GDP has been falling consistently for over 50 years, as both industry and services have expanded, and it currently represents 8.3% of the GDP. Still, agriculture remains an important source of employment in the country, as it employs 15.9% of the workforce. As reported by the National Administrative Department of Statistics (DANE), between January and September 2023, notable growth was observed in the value added of fishing and aquaculture, with an increase of 9.9%, and in agricultural crops excluding coffee, which saw a 0.9% rise. Conversely, coffee experienced a decline of -2.6%, and livestock decreased by -0.9%.

Colombia is the most industrially diverse country of the Andean Community, with four major industrial centres: Bogota, Medellin, Cali, and Barranquilla. Most industries in the country are driven by agriculture and commodities, with the main industries being textile, chemical products, metallurgy, cement, cardboard containers, plastic resins and beverages. The sector represents 26.7% of the GDP and employs 20.1% of the workforce.

The services sector’s importance has increased in recent years, becoming the backbone of the Colombian economy as it represents 54.8% of the GDP and employs 63.9% of the workforce. Tourism is one of the most important components of the service sector and has been particularly buoyant over the past few years, especially in Bogota, Medellin, Cartagena, Cali, and Barranquilla. Colombia saw a record number of tourists visiting the country in 2023, with around 5.8 million non-residents reported, 30% than the pre-COVID level (Ministry of Commerce, Industry and Tourism ). The BPO sub-sector is one of the most dynamic with an average annual growth of 19% during the last 7 years.

 
Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 15.9 20.1 63.9
Value Added (in % of GDP) 8.3 26.7 54.8
Value Added (Annual % Change) -1.9 6.8 8.8

Source: World Bank - Latest available data.

 

Find more information about your business sector on our service Market Reports.

 
 
Monetary Indicators 20162017201820192020
Colombian Peso (COP) - Average Annual Exchange Rate For 1 MUR 85.9385.5987.1092.4293.90

Source: World Bank - Latest available data.

 
 

Find out all the exchange rates daily on our service Currency Converter.

Indicator of Economic Freedom

Definition:

The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labour freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.

Score:
68,1/100
World Rank:
49
Regional Rank:
6

Economic freedom in the world (interactive map)
Source: Index of Economic Freedom, Heritage Foundation

 

Business environment ranking

Definition:

The business rankings model measures the quality or attractiveness of the business environment in the 82 countries covered by The Economist Intelligence Unit’s Country Forecast reports. It examines ten separate criteria or categories, covering the political environment, the macroeconomic environment, market opportunities, policy towards free enterprise and competition, policy towards foreign investment, foreign trade and exchange controls, taxes, financing, the labour market and infrastructure.

Score:
6.21/10
World Rank:
51/82

Source: The Economist Intelligence Unit - Business Environment Rankings 2020-2024

 

Country Risk

See the country risk analysis provided by Coface.

 

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Foreign Trade in Figures

Colombia's foreign trade represents around 40.9% of the country’s GDP, according to the World Bank’s latest figures. Colombia mainly exports petroleum oils (32.9%), coal (18.3%), coffee (7.2%), gold (5.2%), and cut flowers (3.6%), whereas the country's main imports include petroleum oils (8.8%), telephone sets (3.9%), motor vehicles (3.5%), aircrafts (3%), maize or corn (2.8%), and medicaments (2.6% - data Comtrade 2022).

According to data from Comtrade, in 2022, the main export partners were the United States (26.9%), Panama (10.2%), Netherlands (4.7%), India (4.3%), and Brazil (4.1%); with imports coming chiefly from the United States (24.5%), China (24.2%), Brazil (7.1%), Mexico (5.4%), and France (3.2%). Colombia has signed trade agreements with the ANC countries (Andean Community of Nations), the MERCOSUR countries, the Central American and Caribbean countries and the European Union. Along with Mexico, Chile and Peru, Colombia founded the Pacific Alliance in 2012, designed to boost trade relations with Asian emerging markets. The country is also part of numerous free trade agreements with Chile, Guatemala, Honduras, El Salvador, Canada, Mexico, Switzerland, Norway, Iceland, Liechtenstein and the United States. The free-trade agreement with the United States, which came into force in May 2012, has had a particularly large impact in the Colombian economy, given that the United States is the country's biggest trade partner.

In 2022, the country’s goods exports increased by 41.4% to USD 57 billion, with imports following a slower pace (+26.6% y-o-y) to USD 77.4 billion. As per services, exports stood at USD 12.2 billion against USD 17.5 billion in imports (data WTO). The overall trade deficit was estimated at 7.2% of the country’s GDP, from 7.6% one year earlier (World Bank). According to data from DANA, in 2023, imports in Colombia fell by 18.9% y-o-y, while exports increased by 25.5%. The decrease in Colombian exports has also resulted in only a 3.8% growth in the number of national companies reaching international markets: from 8,890 companies in 2022 to 9,228 in 2023.

 
Foreign Trade Indicators 20192020202120222023
Imports of Goods (million USD) 52,70343,48961,10177,41362,797
Exports of Goods (million USD) 39,48931,00840,28756,99949,545
Imports of Services (million USD) 14,95210,15014,19018,03516,569
Exports of Services (million USD) 10,6685,9158,17113,62715,242
Imports of Goods and Services (Annual % Change) 7.3-19.926.723.9n/a
Exports of Goods and Services (Annual % Change) 3.1-22.715.914.9n/a
Imports of Goods and Services (in % of GDP) 21.720.623.928.1n/a
Exports of Goods and Services (in % of GDP) 15.913.516.320.5n/a
Trade Balance (million USD) -9,863-8,870-13,984-12,028n/a
Trade Balance (Including Service) (million USD) -14,148-13,105-20,002-16,427n/a
Foreign Trade (in % of GDP) 37.634.140.248.6n/a

Source: WTO – World Trade Organisation ; World Bank , Latest Available Data

 

Main Partner Countries

Main Customers
(% of Exports)
2022
United States 26.9%
Panama 10.2%
Netherlands 4.7%
India 4.3%
Brazil 4.1%
See More Countries 49.9%
Main Suppliers
(% of Imports)
2022
United States 24.5%
China 24.2%
Brazil 7.1%
Mexico 5.4%
France 3.2%
See More Countries 35.6%

Source: Comtrade, Latest Available Data

 
 

Main Products

57.3 bn USD of products exported in 2022
Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals, crude 28.3%
Coal; briquettes, ovoids and similar solid fuels...Coal; briquettes, ovoids and similar solid fuels manufactured from coal 18.3%
Coffee, whether or not roasted or decaffeinated;...Coffee, whether or not roasted or decaffeinated; coffee husks and skins; coffee substitutes containing coffee in any proportion 7.2%
Gold, incl. gold plated with platinum, unwrought...Gold, incl. gold plated with platinum, unwrought or not further worked than semi-manufactured or in powder form 5.2%
Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals (excl. crude); preparations containing >= 70% by weight of petroleum oils or of oils obtained from bituminous minerals, these oils being the basic constituents of the preparations, n.e.s.; waste oils containing mainly petroleum or bituminous minerals 4.6%
See More Products 36.4%
77.4 bn USD of products imported in 2022
Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals (excl. crude); preparations containing >= 70% by weight of petroleum oils or of oils obtained from bituminous minerals, these oils being the basic constituents of the preparations, n.e.s.; waste oils containing mainly petroleum or bituminous minerals 8.8%
Telephone sets, incl. telephones for cellular...Telephone sets, incl. telephones for cellular networks or for other wireless networks; other apparatus for the transmission or reception of voice, images or other data, incl. apparatus for communication in a wired or wireless network [such as a local or wide area network]; parts thereof (excl. than transmission or reception apparatus of heading 8443, 8525, 8527 or 8528) 3.9%
Motor cars and other motor vehicles principally...Motor cars and other motor vehicles principally designed for the transport of persons, incl. station wagons and racing cars (excl. motor vehicles of heading 8702) 3.5%
Powered aircraft "e.g. helicopters and aeroplanes...Powered aircraft "e.g. helicopters and aeroplanes"; spacecraft, incl. satellites, and suborbital and spacecraft launch vehicles 3.0%
Maize or cornMaize or corn 2.8%
See More Products 78.1%

Source: Comtrade, Latest Available Data

 
 

To go further, check out our service Import-Export Flows.

 
 

Main Services

13.4 bn USD of services exported in 2022
46.57%
21.90%
18.13%
7.06%
1.66%
1.65%
1.21%
1.00%
0.63%
0.19%
0.01%
17.6 bn USD of services imported in 2022
35.64%
24.34%
9.89%
9.09%
7.87%
7.15%
2.90%
1.92%
0.65%
0.54%
0.01%

Source: United Nations Statistics Division, Latest Available Data

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Sources of General Economic Information

Ministries
Official list of ministries
Ministry of Foreign Affairs (in Spanish)
Ministry of Finance and Public Credit (in Spanish)
Ministry of Commerce, Industry and Tourism (in Spanish)
Directorate of Taxes and Customs in Colombia (in Spanish)
Ministry of Mines and Energy (in Spanish)
Ministry of Environment and Sustainable Development (in Spanish)
Statistical Office
National Institute of Statistics
Datos Abiertos - Open Data Portal (in Spanish)
Central Bank
Central Bank of Colombia
Stock Exchange
Bogota Stock Exchange
Search Engines
Google Colombia
Economic Portals
Finance Colombia
The Bogota Post

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Political Outline

Current Political Leaders
President: Gustavo Francisco Petro (since 7 August 2022)
Next Election Dates
Presidential: May 2026
Congress: March 2026
Main Political Parties
About 60 political parties are formally recognised in Colombia, but most are not represented in the Chamber of Deputies. The main political parties in Colombia are:

- Social Party of National Unity (UN): centre-right, social liberalism, third way politics
- Democratic Centre (CD): centre-right, social conservatism, economic liberalism
- Conservative Party (PC): centre-right, social conservatism, economic liberalism, Christian democracy
- Colombian Liberal Party (PLC): centre-left, social liberalism, social democracy
- Radical Change Party (CR): centre-right, conservative liberalism
- Alternative Democratic Pole (PDA): centre-left, protectionism, social democracy, democratic socialism
- Independent Movement of Absolute Renovation (MIRA): centre-right to right, conservative liberalism, social conservatism, Christian democracy
- Green Alliance: centre-left, progressivism, pacifism, green politics, green liberalism
- Independent Movement of Absolute Renovation (MIRA): centre-right, communitarianism, social conservatism, Christian democracy

Type of State
Republic based on parliamentary democracy.
Executive Power
The President is both the Head of State and the Head of Government. He or she holds executive power. The President and Vice President are both elected by universal suffrage for a single term of four years and cannot be reelected, even for a nonconsecutive term.
Legislative Power
The Colombian legislature is bicameral. The parliament, called 'Congress', consists of the Senate (upper house) and the Chamber of Deputies (lower chamber). The 108 members of the Senate and the 188 members of the Chamber of Deputies are elected for a period of four years.
 

Indicator of Freedom of the Press

Definition:

The world rankings, published annually, measures violations of press freedom worldwide. It reflects the degree of freedom enjoyed by journalists, the media and digital citizens of each country and the means used by states to respect and uphold this freedom. Finally, a note and a position are assigned to each country. To compile this index, Reporters Without Borders (RWB) prepared a questionnaire incorporating the main criteria (44 in total) to assess the situation of press freedom in a given country. This questionnaire was sent to partner organisations,150 RWB correspondents, journalists, researchers, jurists and human rights activists. It includes every kind of direct attacks against journalists and digital citizens (murders, imprisonment, assault, threats, etc.) or against the media (censorship, confiscation, searches and harassment etc.).

World Rank:
134/180
 

Indicator of Political Freedom

Definition:

The Indicator of Political Freedom provides an annual evaluation of the state of freedom in a country as experienced by individuals. The survey measures freedom according to two broad categories: political rights and civil liberties. The ratings process is based on a checklist of 10 political rights questions (on Electoral Process, Political Pluralism and Participation, Functioning of Government) and 15 civil liberties questions (on Freedom of Expression, Belief, Associational and Organizational Rights, Rule of Law, Personal Autonomy and Individual Rights). Scores are awarded to each of these questions on a scale of 0 to 4, where a score of 0 represents the smallest degree and 4 the greatest degree of rights or liberties present. The total score awarded to the political rights and civil liberties checklist determines the political rights and civil liberties rating. Each rating of 1 through 7, with 1 representing the highest and 7 the lowest level of freedom, corresponds to a range of total scores.

Ranking:
Partly Free
Political Freedom:
3/7

Political freedom in the world (interactive map)
Source: Freedom in the World Report, Freedom House

 

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COVID-19 Country Response

Travel restrictions
Regularly updated travel information for all countries with regards to Covid-19 related entry regulations, flight bans, test and vaccines requirements is available on TravelDoc Infopage.
To find information about the current travel regulations, including health requirements, it is also advised to consult Travel Regulations Map provided and updated on a daily basis by IATA.
Import & export restrictions
A general overview of trade restrictions which were adopted by different countries during the COVID-19 pandemic is available on the International Trade Centre's COVID-19 Temporary Trade Measures webpage.
Economic recovery plan
For the general overview of the key economic policy responses to the COVID-19 pandemic (fiscal, monetary and macroeconomic) undertaken by the government of Colombia, please consult the country's dedicated section in the IMF’s Policy Tracker platform.
Support plan for businesses
For an evaluation of impact of the Covid pandemic on SMEs and an inventory of country responses to foster SME resilience, refer to the OECD's SME Covid-19 Policy Responses document.
You can also consult the World Bank's Map of SME-Support Measures in Response to COVID-19.

 

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Latest Update: May 2024