Colombia

colorful colonial style balconies in Salento Colombia
Photo by Barna Tanko / Shutterstock
Country
Colombia
Latin America & Caribbean

Colombia has a track record of prudent macroeconomic and fiscal management, anchored on an inflation targeting regime, a flexible exchange rate, and a rule-based fiscal framework, which allowed the economy to grow uninterrupted since 2000. Also, Colombia halved poverty over the past ten years.

However, productivity growth is low and it has actually been a drag on economic growth. A large infrastructure gap, low skill levels, low trade integration and barriers to domestic competition are among the factors that weigh on total factor productivity. Exports are highly concentrated in non-renewable commodities (oil in particular), which increases the exposure of the economy to price shocks. Finally, Colombia is one of the countries with the highest income inequality and labor market informality in Latin America. After accelerating to 3.3 percent in 2019, economic growth was on track to accelerate further in 2020, but the COVID-19 pandemic hit the economy hard, causing the worst recession in almost half a century.

The Government responded promptly to the crisis and took decisive actions to protect lives and livelihood, and to support the economy. On the fiscal front, the Government announced a sizable fiscal package for 2020 and 2021 totaling over COP 31 trillion (or almost 3 percent of 2019 GDP), to provide additional resources for the health system, increase transfers for vulnerable groups through the expansion of existing programs and the establishment of new ones (Ingreso Solidario, an unconditional cash transfer program, and VAT reimbursements for low-income segments of the population), delayed tax collection in selected sectors, lower tariffs for strategic health imports, and help for hard-hit firms to pay employees (Programa de Apoyo al Empleo Formal, PAEF). In addition, the government also set up special lines of credit and loan guarantees for firms in sectors that have been deeply affected by the crisis. To ensure adequate fiscal support, the suspension clause of the fiscal rule was activated for 2020 and 2021. On the monetary front, the central bank cut its intervention rate by 250 basis points between March and September and reduced it to its lowest historical level. In addition, it introduced a broad range of measures to increase liquidity.

Source: World Bank, Colombia Country Overview

Investment OpportunitiesDescribes the number of investment opportunities in the country.
20
Most Affected SDGsDescribes the three priority SDGs the investment opportunities address in the country.
Industry, Innovation and Infrastructure (SDG 9) Decent Work and Economic Growth (SDG 8) Life on Land (SDG 15)
Priority Target SectorsDescribes the three priority sectors the investment opportunities address in the country, based on the SASB Sustainable Industry Classification System®️ (SICS®️) classification.
Technology and Communications, Infrastructure, Food and Beverage
Ease of Doing Business ScoreDeveloped by the World Bank, the Ease of Doing Business Score helps assess the absolute level of regulatory performance over time. An economy’s ease of doing business score is reflected on a scale from 0 to 100, where 0 represents the lowest and 100 represents the best performance.
See the World Bank Ease of Doing Business site for more information.
70.1
Human Development IndexDeveloped by the United Nations Development Programme (UNDP), the Human Development Index is a summary measure for assessing a country’s long-term progress in three basic dimensions of human development: a long and healthy life, access to knowledge and a decent standard of living.
See the UNDP Human Development Index site for more information.
0.767

Opportunity

Opportunities 20 Investment Opportunity Areas

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