Rise in private consumption, investment will support growth

The Colombian economy has had a quiet year compared to its neighbors. Next to Venezuela’s financial mess and Peru’s gleaming outlook, Colombia has not made much noise in the world of international financial news.

But that doesn’t mean the country has nothing to look forward to. After GDP growth of 4.5% in 2013, down from 4.8% the previous year due to weak foreign demand and a sluggish, but still relatively strong manufacturing sector. Colombia is heading for another year of decent growth in 2014.

Trading Economics predicts that the economy will grow by 3.07%, while the Central Bank of Colombia sets growth at 4%. The BBVA research center predicts it will increase by 5%.

But the Colombian economy, mainly driven by oil and mining, has been hit by falling foreign demand: Colombia grew 6.6% in 2011, but has steadily declined since. Indeed, its main trading partners, primarily the United States, are still on the path to a strong recovery.

“The economy will grow this year at levels similar to 2012, and it’s decent growth given that other countries are developing below that level,” said central bank chief José Darío Uribe.

Private consumption will accelerate in the new year, according to BBVA Research, as will investment. The bank predicts that consumption will increase by 4.4% and fixed investment will increase by 7.1%.

Inflation will drop from 2.14% currently to 1.69, according to Trading Economics – far from other Latin American countries with economies of similar size like Argentina, which has 25% inflation, and Venezuela, which topped the top 30%. countries whose prices are exploding in the region.

Like many other cases in the region, unemployment is the weak point of the Colombian economy. The year 2013 ended with a rate of 8.48%, with a slight increase in the last quarter. Even though unemployment percentages are higher than in other countries, they are down from Colombia’s historic high of 17.48% in 2012.

(Note: Bogota photo by Shutterstock.com.)

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