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Since the mid-1990s Colombia pursues an economic policy which is based on market principles and seeks to attract foreign investment into the country.
As a result, Colombia's economy grew at an average of 6.2 percent between 2000 and 2007. In the wake of the international economic crisis in 2008, however, growth fell briefly, but did so only to 4.4 percent before rebounding to the dynamic development of the previous years in 2011 (6.6 percent). During 2014 a growth rate of 4.6 percent was achieved. The gross domestic product of Colombia was 384 billion USD and per capita income was 8,005 USD for the same period.
The major sectors fueling the growth of the Colombian economy are the construction industry, public services, and real estate and financial services.
Colombia has been able to achieve a significant decline in the poverty rate, which stands at 28.5 percent in recent years. Nevertheless, there are continuing substantial disparities in income and wealth distribution. The official unemployment rate in 2014 averaged 9.1 percent. A significant part of the workforce - estimated around 50 percent - is in the informal sector; underemployment is estimated at over 25 percent. The deficit of the total budget in 2014 stood at 2.42 percent of GDP. The inflation rate rose significantly in 2014 to 3.66 percent and is currently continuing with the uptrend. Reasons are the weak peso and rising food prices.
Colombia is committed to free trade. The international economic relations are based on a network of free trade agreements (with South American countries, the US, Canada and the EU); more are currently being negotiated. Colombia, however loses out on inadequate infrastructure and partially missing transparency in public decisions.
Major segments of the Colombian economy are agriculture, industry, services, tourism, oil and gas, and mining. In recent years, owing to the property boom, the construction industry has gained significant momentum.
In 2014, the exports of Colombia amounted to 54.8 billion USD, while the imports stood at 61.2 billion USD. The most important export goods of the country are oil, coal, coffee, cut flowers, bananas, nickel, and food products. Main import items are machinery, motor vehicles, telecommunications and electrical equipment, chemical products, iron and steel products, plastics and agricultural products.
The most important trade partners are traditionally the United States (around 25.7 percent of Colombian exports), followed by the EU (17.2 percent). Trade with China is also rapidly gaining importance (10 percent). Another important trade partner is the Andean Community (5.9 percent).
Why invest in Colombia?
- According to the 2012, IMD Workforce Growth Rate, Colombia is a country with one of the largest annual increases in workforce availability. Such ample amount of workforce allows for scalability of any major operation.
- A little known attribute of Colombia is its unique geographical location in the Western Hemisphere. As a result, it serves as a halfway point between most major trade destinations, including Sydney and London, New York and Sao Paolo and, Tokyo and Capetown. This will become a positive factor for Colombia as it cements its place among the global trading community.
- Colombia also has ample availability of skilled labour. More than 200,000 students graduate from college every year. Of these 53 percent hold an undergraduate degree while 28 percent have gotten a postgraduate one.
- A key factor in Colombia’s sustained growth over the years is its stable financial sector. Colombian banks have a long history of preventing corruption and money laundering. As a result, they are some of the best performing banks in the region, fuelling economic growth in their wake.