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Colombia

 Flag of Colombia

Last reviewed: 02 June 2009

Country information

ECONOMY

Basic Economic Facts

GDP: US$214.7 billion (est 2008)
GDP per head: US$4,979 (est 2008)
Annual Growth: 2.59% (2008)
Inflation: 7.67% (est 2008)
Unemployment: 10.6% (2007)
Major Industries: Oil, Mining, Construction, Financial Sector, Agriculture, Manufacturing and Transport
Major trading partners: US, Venezuela, other Andean Countries, Mexico, Brazil, EU and China.
Value of UK exports to Colombia: £140 million (2007)
Value of UK imports from Colombia: £370 million (2007)
Whist the well publicised security issues in Colombia can be a deterrent to companies to do business there, many well-known companies operate there and do so very profitably.

Despite years of violence, Colombia has managed to maintain long-term sustainable growth and remains one of the larger economies in Latin America. Crude oil, coal, coffee and cut flowers are Colombia's principal legal exports.

Whilst the government of Alvaro Uribe has strengthened the country's macroeconomic stability and improved its long term potential, the hoped-for structural reforms in the areas of taxation, pensions and labour laws have not yet materialised.

Security, by and large, tends to be a manageable risk.  More problematic to most businesses operating there, however, is often instability of the legal and tax frameworks, to which frequent changes are made, therefore making medium to long term planning very difficult.

In February 2006, the Colombians signed a Free Trade Agreement (FTA) with the US which was expected to take effect from early 2008, if ratified by the US Congress. This is aimed at providing a stimulus for the economy, as business – both national and international – will look to capitalise on the immediate duty free access to the vast US market for 99.9% of all Colombian products that the agreement will provide. However, there has also been debate over whether the FTA will impact adversely on more sensitive sectors of the economy such as sugar, chicken and rice. Democratic members of the US Congress have delayed ratification of the FTA, due to concerns about the human rights situation in Colombia.

Colombia is a member the CAN bloc of countries (Colombia, Peru, Ecuador and Bolivia), with whom the EU started negotiations in 2007 for an EU-CAN association agreement.

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