embassy of colombia in germany ministry of foreign affairs - republic of colombia the colombian...

Embassy of Colombia in Germany Ministry of Foreign Affairs - Republic of Colombia

The Colombian Economy


2

Main facts

• Population: approx. 46.5 million• Surface area: 1,141,748 Km2• Official language: Spanish• Capital city: Bogotá D.C.


3

Index

1. GDP2. Unemployment, Poverty and Inequality3. Inflation and Monetary Policy4. Fiscal Policy5. Mining, energy, and infrastructure6. Trade, foreign investment, and tourism


4

Historical GDP Growth (%)

Source: World Development Indicators

Historically, Colombia has exhibited a moderate, relatively constant rate of GDP growth. The only recession observed during the past decades occured in the year 1999.

-6

-4

-2

0

2

4

6

8

1019

6119

6319

6519

6719

6919

7119

7319

7519

7719

7919

8119

8319

8519

8719

8919

9119

9319

9519

9719

9920

0120

0320

0520

0720

0920

11


5

GDP per capita (current US dollars)

Source: International Monetary Fund

7,131.61

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000


6

-1

0

1

2

3

4

5

6

7

8

9

I II IIIIV I II IIIIV I II IIIIV I II IIIIV I II IIIIV I II IIIIV I II IIIIV I II IIIIV I II IIIIV I II IIIIV I II IIIIV

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

GDP Growth in the Last Decade

Source: DANE

Colombian GDP grew 5,9% 2011.

Annual GDP Growth (%)

1,7% 2,5% 3,9% 5,3% 4,7% 6,7% 6,9% 3,5% 1,7% 4,0% 5,9%


7

5.934.52

1.441.74

-6

-4

-2

0

2

4

6

8

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Colombia Latin America and the Caribbean

Euro area United States

GDP Growth by Regions

Source: International Monetary Fund

The emerging markets have had higher GDP growth than advanced economies throughout the last decade. Moreover, Colombia resisted the global crisis better than the rest of its region.

Annual GDP Growth (%)


8

16.0

23.5

61.7

19.0 20.1

0

10

20

30

40

50

60

70

Public spending Investment Householdconsumption

Exports Imports

Composition of GDP by Demand

Source: World Development Indicators

Composition of GDP by Demand, 2011 (% of GDP)


9

5.9

2.6

17.2

6.5

11.4

21.5

GDP

Public spending

Investment

Household consumption

Exports

Imports

6.1

3.0

12.4

6.1

15.8

20.1

GDP

Public spending

Investment

Household consumption

Exports

Imports

GDP Growth – Demand Side

Annual Growth in 2011-IV (%) Annual Growth in 2011 (%)

Current GDP growth is led by a strong private demand.

Source: DANE


10

6.1

-1

0

1

2

3

4

5

6

7

8

9


2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Household ConsumptionHousehold Consumption, Annual Growth (%)

Household consumption, which represents almost two thirds of Colombian GDP, decelerated during the past global crisis. However, it is now growing at pre-crisis levels.

Source: DANE


11

Composition of GDP by SupplyComposition of GDP by Supply, 2011 (% of GDP)

Source: DANE

Agriculture7%

Mining11%

Industry13%

Utilities3%

Construction7%

Commerce11%

Transport6%

Financial services18%

Social services15%

Taxes9%


12

GDP Growth – Supply Side

Annual Growth in 2011-IV (%) Annual Growth in 2011 (%)

Source: DANE

All the sectors of the economy expanded during 2011.

5.9

2.2

14.3

3.9

1.8

5.7

5.9

6.9

5.8

3.1

GDP

Agriculture

Mining

Industry

Utilities

Construction

Commerce

Transport

Financial services

Social services

6.1

-2.0

18.1

4.1

2.7

10.7

5.3

6.0

6.4

3.2

GDP

Agriculture

Mining

Industry

Utilities

Construction

Commerce

Transport

Financial services

Social services


13

18.1

-15

-10

-5

0

5

10

15

20

25


2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Mining

Source: DANE, ANH

Mining, Annual Growth (%)

The mining activity has been going through a boom during the past years, due mainly to higher oil production.

Oil production (kbpd)957

500

550

600

650

700

750

800

850

900

950

1000

Apr 0

7

Jul 0

7

Okt

07

Jan

08

Apr 0

8

Jul 0

8

Okt

08

Jan

09

Apr 0

9

Jul 0

9

Okt

09

Jan

10

Apr 1

0

Jul 1

0

Okt

10

Jan

11

Apr 1

1

Jul 1

1

Okt

11

Jan

12

Apr 1

2


14

5.3

-4

-2

0

2

4

6

8

10

12


2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Commerce

Source: DANE

Commerce, Annual Growth (%)

The commercial sector experienced a fast recovery following the global crisis and is currently growing at pre-crisis levels.


15

4.1

-8

-6

-4

-2

0

2

4

6

8

10

12


2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Industry

Source: DANE

Industry, Annual Growth (%)

The manufacturing industry is also expanding, but at a slower rate than before the crisis.


16

Index

1. GDP2. Unemployment, Poverty and Inequality3. Inflation and Monetary Policy4. Fiscal Policy5. Mining, energy, and infrastructure 6. Trade, foreign investment, and tourism


17

64.5

56

58

60

62

64

66

68

Okt

01

Mai

02

Dez

02

Jul 0

3

Feb

04

Sep

04

Apr 0

5

Nov

05

Jun

06

Jan

07

Aug

07

Mrz

08

Okt

08

Mai

09

Dez

09

Jul 1

0

Feb

11

Sep

11

Apr 1

2

10.9

8

9

10

11

12

13

14

15

16

17

18

Apr 0

1O

kt 0

1Ap

r 02

Okt

02

Apr 0

3O

kt 0

3Ap

r 04

Okt

04

Apr 0

5O

kt 0

5Ap

r 06

Okt

06

Apr 0

7O

kt 0

7Ap

r 08

Okt

08

Apr 0

9O

kt 0

9Ap

r 10

Okt

10

Apr 1

1O

kt 1

1Ap

r 12

UnemploymentUnemployment Rate (%)

Source: DANE

Colombia‘s unemployment rate increased slightly during the global crisis, but has been recovering since.

General Participation Rate (%)


18

20

17 17

16

18

16

15

13

18

1615

14

16

14

12

1110

12

14

16

18

20

22

2002 2003 2004 2005 2008 2009 2010 2011

Extreme Poverty (previous methodology)

Extreme Poverty (new methodology)

5451 51

5046 45

44

40

5048

4745

4240

37

34

30

35

40

45

50

55

60

2002 2003 2004 2005 2008 2009 2010 2011

Poverty (previous methodology) Poverty (new methodology)

Poverty

Source: National Planning Department

Incidence of Poverty (%)

Poverty in Colombia remains elevated, but has been falling during the decade. The Government expects to reduce the incidence of poverty to 32% and extreme poverty to 9,5% by 2014.

Incidence of Extreme Poverty (%)


19

Inequality

Source: National Planning Department

Gini Index*

Income inequality is still elevated and has not changed much in the past decade.

*: The index varies between 0 (total equality) and 1 (total inequality).

0.572

0.554

0.558 0.557

0.567

0.5570.560

0.548

0.54

0.54

0.55

0.55

0.56

0.56

0.57

0.57

0.58

2002 2003 2004 2005 2008 2009 2010 2011


20

Index



21

Central Bank

• Colombia has an independent central bank, Banco de la República, in charge of maintaining price stability.

• The central bank adopted inflation targeting in 1999.


22

Annual Inflation (%)

Annual inflation currently stands within the central bank‘s inflation target range (2% to 4%).

Source: Central Bank

3.43

3.90

1

2

3

4

5

6

7

8

9Ap

r 04

Okt

04

Apr 0

5

Okt

05

Apr 0

6

Okt

06

Apr 0

7

Okt

07

Apr 0

8

Okt

08

Apr 0

9

Okt

09

Apr 1

0

Okt

10

Apr 1

1

Okt

11

Apr 1

2

Inflation Core inflation


23

Index



24

Fiscal Balance (% of GDP)

Source: Ministry of Finance

Colombia has a relatively low fiscal deficit.

-2.9

-7

-6

-5

-4

-3

-2

-1

0


25

Gross Public Debt (% of GDP)

Source: Ministry of Finance

36

41.5

47.5 46.943 42.2

39.335.9 35.7 36.7 37.3 35.8

0

5

10

15

20

25

30

35

40

45

50

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Internal public debt External public debt


26

Main Reforms: Fiscal Sustainability

• The concept of Fiscal Sustainability has been included as one of the criteria in the Political Constitution of Colombia.

• From now on, the economic aspect will have a weight on the government spending decisions. This way, the government will be able to satisfy the citizen‘s fundamental rights not just in the present but also in the future.


27

Main Reforms: Fiscal Rule

• The Fiscal Rule intends to institutionalize the government‘s fiscal discipline.

• Superavitary income must be saved, and will be used to reduce the public debt or as countercaclical spending.

• The structural deficit must be below 1% by 2022.


28

Main Reforms: Royalties

• The Royalties coming from the exploitation of oil and mining will have a better administration.

• Resources will be distributed to the regions where they are most needed, and will be used to finance proyects with regional impact.

• 10% of the resources will be destined to the Science, Technology, and Innovation Fund.

• Royalties amounted to EUR 2,860 million in 2011, and are expected to reach EUR 3,971 million in 2012.


29

Index

1. GDP2. Unemployment, Poverty and Inequality3. Inflation and Monetary Policy4. Fiscal Policy5. Mining, energy, and infrastructure6. Trade, foreign investment, and tourism


30

Coal production (million tonnes)

Source: UPME, Ministry of Foreign Affairs

59,0665,4

69,973,5 72,81 74,35

63,64

0

10

20

30

40

50

60

70

80

2005 2006 2007 2008 2009 2010 2011*

*: Year to date until Q3 2011.

Colombia is the largest producer of coal in Latin America and the 10th largest in the world.


31

Renewable Energy

• In 2008, Colombia‘s renewable energy production was 46,403 GWh in hydro generation, 590 GWh in solid biomass, and 54GWh in wind generation.

• Colombia‘s geographical diversity makes it well suited to renewable energy production:– The Magdalena, La Guajira, San Andrés and Providencia are well

suited to solar energy production.– Empresas Públicas de Medellín (EPM) has put the first windfarm

into operation (Jepirachi) in the Guajira, with 15 turbines providing 19.5 MW to the National Grid.

– 1.5 million tonnes of sugarcane biomass and 450,000 tonnes of rice husks biomass could potentially be used for energy production.

Source: Ministry of Foreign Affairs


32

Distribution of power generation in Colombia

Hidraulic80%

Cogenerator1%

Thermal13%

Other6%

Source: XM


New concessions

Current concessions

New infrastructure 2012-2020

VILLAVICENCIO

CALI

BUGA

PEREIRA

SOGAMOSO

PALO DE LETRASCAUCACIA

MONTERIA

SINCELEJO

CARMEN DE BOLIVAR

VALLEDUPAR

BARRANQUILLA

CARTAGENA

SANTA MARTA

RIOHACHA

PARAGUACHON

SAN ROQUE

NECOCLÍ

PASTO

ZIPAQUIRA

PAMPLONA

SIMITÍ

ACHÍ

SAN MARCOS

SAN PELAYO

TUNJA

GIRARDOT

CUCUTA

RUMICHACA

NEIVA

VILLAVICENCIO

PUERTO GAITAN

POPAYAN

CALI

SOGAMOSO

B/MANGA

CHACHAGÛÍ

ESPINAL

ARMENIA

IBAGUE

TUNJAPTO. SALGAR

CÁQUEZA

CALERA

SOPO

LA PAILA

BUENAVENTURA

STDER. QUILICHAO

YOPAL

TAME

ARAUCA

SISGAEL SECRETO

MOCOA

CARTAGO

PLANETARICA

LA YE

TOLUVIEJO

CRUZ DEL VISOCARRETO

PONEDERA

LA PAZ

SAN JUANBUENAVISTA

CUESTECITAS

BARBOSA

AGUACLARA OCANA

MANIZALES VILLETA

MEDELLIN

BOGOTA

BARRANCAB.REMEDIOS

Pto. Arimena

EL TIGRE

PTO BERRÍOSanta fé de Ant.

Bolombolo

Tres Puertas

Camilo C

Tunel de Occidente

Over 6,000 km of new roadways will receive concessions: Approx. USD 80 billion

Source: National Infrastructure Agency


34

Index



35

-2751-2144

-2820 -2902

16262160

333 78 103

11401392

-143-824

470

16651469

4955

-4000

-3000

-2000

-1000

0

1000

2000

3000

4000

5000

600019

95

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

Overall Trade Balance (USD Million)

Source: DANE


36

Trade with Germany

• Exports to Germany experienced an annual growth of 67.8% in 2011, reaching USD 419 million (0.7% of total exports during the period).

• Imports from Germany experienced an annual growth of 33.6% in 2011, reaching USD 2,215 million (4.1% of total exports during the period).

Source: DANE


37

17

-135

7

-60

13

-29 -89 -153-326-375-394

75

-594

-851-920

-1345

-1715-2000

-1800

-1600

-1400

-1200

-1000

-800

-600

-400

-200

0

200

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

Trade with GermanyTrade Balance with Germany (USD Million)

according to DANE

There is a significant difference between bilateral trade figures published by the authorities of Colombia (DANE) and Germany (DESTATIS), as Colombia reports exports according to port of destination and Germany according to country of origin.

In 2011, DANE reported exports of Colombia to Germany of USD 419 million (EUR 325 million), whereas DESTATIS reported imports of Germany from Colombia of EUR 1,571 million. According to German figures, Colombia has been traditionally within the top three providers of carbon to Germany.

Embassy of Colombia in Germany Ministry of Foreign Affairs - Republic of Colombia 38

Free Trade Agreements2011 2012 2013 2014

Andean Community 55.6 56.5 57.4 58.4Venezuela 29.8 30.4 31.0 31.6Mercosur 245.7 247.9 249.9 251.9Chile 17.4 17.6 17.8 18.0Mexico 109.7 110.8 111.9 113.0Northern Triangle 28.8 29.4 29.9 30.5Canada 34.4 34.7 34.9 35.2Switzerland and Liechtenstein 7.8 7.9 7.9 8.0Norway 5.0 5.1 5.1United States 315.9 318.9 321.9European Union 502.7 503.7Panama 3.7 3.7Iceland 0.3 0.3Sotuh Korea 49.3Turkey 73.8Israel 7.9Total 529.3 856.0 1371.5 1512.3

Population (Million inhabitants)Free Trade Agreements

In 2012, Colombian exporters will have a market of around 850 million consumers around the world.

Source: Ministry of Commerce, Industry, and Tourism


39

Foreign Direct Investment

• Of the total stock of Foreign Direct Investment of Germany in the rest of the world, 0.07% has gone to Colombia.

• In 2010, 0.01% of total FDI in Colombia came from Germany.

Source: OECD, Central Bank


40

Tourism in Colombia


625

791933

10531195 1222

13541475

1582

0

200

400

600

800

1000

1200

1400

1600

1800

2003 2004 2005 2006 2007 2008 2009 2010 2011

Number of tourists entering Colombia (thousands)

2011 was a record year for tourism in Colombia. Close to 1.6 million tourists visited the country, a record amount and a 7,3% increase with respecto to the previous year.


41

Tourism from Germany

13.88515.881

18.12419.050

21.668 22.128

26.138

29.548

41.166

39,3

0,0

5,0

10,0

15,0

20,0

25,0

30,0

35,0

40,0

45,0

12.000

17.000

22.000

27.000

32.000

37.000

42.000

2003 2004 2005 2006 2007 2008 2009 2010 2011

German tourists Annual variation (%, right axis)

German tourists visiting Colombia

Last year, 41.166 Germans visited Colombia, an increase of 39,3% with respect to 2010. In 2011, Germany became the second biggest source of tourism to Colombia from the European Union, second only to Spain.



42

Contact data

José AlzateBeauftragter für Wirtschaft und Handel

Botschaft der Republik [email protected]

+49 30 26396110

mailto:[email protected]

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