Colombia is poised for expansion in 2019 and 2020, despite some internal and external challenges that have not abated since 2018. Regionally, economic growth in 2018 outpaced giants Brazil and Mexico, but trailed the smaller, yet more dynamic economies of Chile and Peru. In May of that year Colombia was invited to become the 37th member of the OECD, a positive development that should increase the country’s international political and economic prominence in the coming decades. Challenges to Colombia’s continued economic progress include relatively high unemployment. In February 2019 the jobless rate reached 12.4% – its highest level since 2011 – though this then fell to 10.3% in 2019. In addition, the country’s export-oriented market is exposed to risks stemming from an expected slowdown in the global economy in 2019 and 2020, resulting from factors such as the prolonged US-China trade war and low growth of developed countries in the EU.
State of Affairs
Colombia’s economy posted growth of 2.7% in 2018, below worldwide expansion of 3.6%. Total GDP was $333.11bn that year, which equated to $6684 per capita. Forecasts by the World Bank see expansion of 3.5% in 2019 – higher than the 2.6% global projection – and 3.6% in 2020. As per the most recent global ranking by the World Bank, in 2017 Colombia had the 38th-largest economy, behind Malaysia and ahead of the Philippines. That year Colombia was the fourth-largest economy in Latin America after Brazil (8th globally), Mexico (15th) and Argentina (21st). According to a second quarter 2019 economic report by Bancolombia, a financial services firm based in Medellín, the GDP growth of Colombia’s main trading partners in 2019 is expected to average 2.2%, revised down from 2.5%. This represents a challenge for exports in Colombia’s natural resource-heavy economy, as a slower pace of external purchases could lead to subdued commodity prices. Internal factors are more positive, however, as private consumption is expected to remain strong, boosting demand. Bancolombia refers to heightened consumer spending as “the basis of economic recovery”.
Four key events in the past five years have shaped the current economic environment. First, the collapse of international oil prices that began in mid-2014 caused government revenue to fall by around 3% of GDP that year. Second, a drought two years later put further pressure on an already depreciated peso and caused a rise in inflation, which hit 8% in August 2016. Third, November 2016 also saw the signing of a revised peace accord between the government of former president Juan Manuel Santos and FARC, which came into effect in 2017. While this put an end to the western hemisphere’s longest armed conflict, it exposed a need for increased state presence, better infrastructure and more funding for public services. However, in the first half of 2019 there were signs of the agreement breaking down, with some militants rearming and many rural villages not seeing the promised roads, schools and electricity from the government. The fourth event is the ongoing geopolitical and humanitarian crisis in Venezuela. This has resulted in the country’s people becoming the world’s second-largest refugee group, with an estimated 3.4m people having fled. The most exposed country to this movement is Colombia, which hosts around 1.2m people, an estimated 30% of whom were Colombians living in Venezuela since before the crisis.
In the context of these events and an ever more competitive globalised world, Colombia’s primary economic goal is to boost productivity, which has stayed largely flat since 1990. In its April 2019 Article IV report on the country, the IMF lists lack of innovation, infrastructure gaps and an inefficient legal system as impediments to greater productivity. The government joins international observers in recognising that this is a major obstacle to Colombia’s ambitions in becoming a high-income country, thus addressing the issue is a central part of the current administration’s development agenda.
President Iván Duque’s four-year term began in August 2018. His administration outlines the country’s short-term goals in the National Development Plan 2018-22 (Plan Nacional de Desarrollo, PND), which was approved by Congress on May 3, 2019. The policy programme looks to “boost production and social inclusion through entrepreneurship and lawfulness”, according to the National Planning Department (Departamento Nacional de Planeación, DNP).
Given that productivity and the effectiveness of legal institutions are two of Colombia’s main structural challenges, this plan highlights the government’s intention to tackle corruption, improve regulatory efficiency and increase productivity during the course of Duque’s administration. Each PND carries legal power and creating one is a constitutional requirement for all incoming administrations.
The primary government body tasked with overseeing and carrying out economic plans is the Ministry of Commerce, Industry and Tourism (Ministerio de Comercio, Industria y Turismo, MINCIT). According to the ministry, its mission is to manage business activity; goods, services and technology production; and tourism in all regions of the country. In doing so, it aims to increase the economy’s competitiveness and sustainability, while encouraging greater added value to increase the presence of Colombia’s offerings in local and international markets.
A number of institutions fall under the umbrella of MINCIT, of which ProColombia and Bancóldex are arguably the most prominent for international economic relations. As a national development bank, Bancóldex promotes business growth and foreign trade. It supports export expansion, small and medium-sized enterprises, tourism development and climate change-related issues. ProColombia, for its part, looks to promote non-mining energy goods and services exports in potential markets; expand the presence of Colombian companies abroad; attract foreign direct investment (FDI); and position Colombia as a tourist destination for vacations and business events. ProColombia has a network of offices in New York, Miami, Frankfurt, Beijing and other cities, which facilitate its promotional activities overseas.
Despite much overlapping of mandates, inter-organisational collaboration on external affairs among government bodies is limited. However, in January 2019 President Duque launched CO-nectados, a programme designed to foster interconnection between different government entities in order to increase trade, specifically through boosting Colombia’s participation in global value chains. The president noted that diplomacy has changed considerably in the 21st century, and that there can no longer be a separation between embassies, promotion and trade. The alliance looks to connect the Ministry of Foreign Affairs, MINCIT and ProColombia through their work abroad to promote Colombian trade and investment. “We are tapping the synergies between the teams and minimising the duplication of actions and budgets so that we are more efficient in the task of strengthening Colombia’s position and its commercial relationship with the world,” Duque said in a speech to kick off the programme.
Although Colombia relies on natural resources for much of its exports, the tertiary sector is steadily becoming the backbone of the economy. According to the most recent figures from the World Bank, 55.7% of Colombia’s 2017 GDP stemmed from services, and such industries employ 64.5% of the workforce. A notable sector in this realm is tourism, which has been referred to by Duque as the country’s “new oil” in terms of investment, income, mobilisation and foreign currency. The sector accounts for less than 5% of GDP but double-digit growth is energising both the government and private sector stakeholders (see Tourism chapter).
Industry, including construction and mining, represents 26.6% of the country’s GDP, while manufacturing carries 11.9%. Together these sectors employ 19.2% of the population. The majority of industrial and manufacturing activity is concentrated in the four largest cities: Bogotá, Medellín, Cali and Barranquilla. They are dominated by the production of textiles, petrochemicals, metals and cement.
Agriculture, forestry and fishing, meanwhile, account for 6.3% of GDP and 16% of total employment. Due to the country’s varied climates, Colombia is an important global player in agricultural markets due to its diversified offer, exporting high volumes of bananas, coffee, cut flowers and sugarcane. Colombia is the world’s second-largest exporter of flowers and the third-largest exporter of coffee.
Colombia is indeed heavily dependent on commodities. The economy experienced a significant slowdown during the middle of the decade, dropping from growth of 4.7% in 2014 to 1.4% in 2017, in large part due to the depressed commodity prices on international markets. This led to the IMF and World Bank issuing statements in 2018 that suggested Colombia step up efforts to diversify its economy and reduce its dependency on commodity exports. The IMF, in particular, noted that “productivity growth in the non-oil sector has been lacklustre even in the boom years” and set out suggestions to boost productivity in key areas. The OECD also mentioned in a 2019 report that Colombia should diversify its economy by increasing regional integration, and widen its participation in global value chains through better coordination of its industrial development, trade and investment. Partly due to uncertainties in the global outlook, the IMF recommends in its Article IV report that Colombia “speed up structural reforms and pro-diversification measures”. This internal evolution would work in tandem with the already strong level of FDI that Colombia enjoys, with the report also noting that the country sees “robust portfolio flows from a diversified set of foreign investors”.
Infrastructure is forecast to be one of the most dynamic sectors in the economy in coming years, as it is recognised as a key ingredient to improving competitiveness. According to the US government trade and investment information portal export.gov, “robust growth” is forecast for the sector, primarily driven by the $25bn Fourth Generation (4G) road infrastructure programme to build, repair and upgrade some 8000 km of national roads and tolls. Launched in 2013, the 4G programme has seen 15 of 29 projects reach financial close by mid-2019, and authorities are targeting to finish an additional seven by year’s end. Another crucial project for the country is Line 1 of the long-awaited Bogotá metro. Valued at $4.4bn, construction is set to begin in March 2020.
As with many countries in the region, Colombia has been using public-private partnerships (PPPs) to boost private sector investment and take pressure off government coffers. As per the May 2019 Infrascope index by the Economist Intelligence Unit, Colombia ties for second in Latin America in terms of enabling PPPs for infrastructure, with an overall score of 77 out of 100, compared to Chile, which ranks first with a score of 80. The value of PPPs in Colombia now represents 5.8% of GDP, the third highest in the region. According to the DNP, in the fourth quarter of 2018, 239 PPPs were in the prefeasibility stage and 76 were in the feasibility stage.
While the use of PPPs represent a positive step in securing financing for needed works, the slower-than-expected progress of the 4G programme means increasing the pace of construction to address the country’s infrastructure gap remains a priority (see Construction & Real Estate chapter).
In December 2018 Colombia’s Congress passed a tax reform bill that included restricting central government spending in order to lower the fiscal deficit from 3.1% of GDP in 2018 to 2.4% in 2019. Ultimately, the goal is to bring the deficit down to 1% of GDP by 2027. However, estimates put the cost of coping with the fallout from the Venezuelan crisis at around 0.5% of GDP, so in March 2019 the country’s fiscal rules committee raised the deficit ceiling for 2019 to 2.7%.
The current account deficit, for its part, was registered at 3.3% of GDP in 2017, equalling $10.3bn. This climbed to $12.7bn in 2018 – 3.8% of GDP – and is projected to be $13.3bn, or 3.9% of GDP, in 2019. Net lending and borrowing, meanwhile, equalled 0.22% of GDP ($628.9m) in 2017, according to the latest information from the World Bank.
Total revenue of the entire public sector ( excluding state-owned oil company Ecopetrol) amounted to 25.2% of GDP in 2018, while total expenditure and net lending equalled 27.4% of GDP. IMF projections for 2019 put these figures rising to 26.2% and 28.7%, respectively. The country’s external debt for 2018 came in at 46.7% of GDP, of which 28.9% was from the public sector. These figures are down from 2017, when external debt represented 47.3% of GDP and 30.3% of it stemmed from the public sector.
However, the IMF forecasts that the country’s external debt will rise to 48.7% of GDP in 2019, of which 29.5% will be from the public sector. Therefore Alberto Carrasquilla, the minister of finance, has noted that the sale of state-held assets may be necessary to meet budgetary targets and comply with fiscal restrictions. Colombia previously sold its 57.6% majority stake in the energy firm Isagen to the Toronto-based company Brookfield Renewable Energy for $2.4bn, in January 2016. Carrasquilla told media in January 2019 that the government holds shares totalling some $50bn in about 100 companies. The government’s 51% stake in electric utility ISA, for example, was being evaluated for a possible whole or partial sale in May 2019.
Monetary policy is directed by Banco de la República de Colombia, the central bank. The bank’s seven-member board of directors analyses the current economic situation and prospects, and compares inflation forecasts with targets. Inflation has remained near the bank’s 3% target since the start of 2018, and is forecast to stay stable for the rest of 2019 and into 2020. The consumer price index in 2018 was aligned with this, rising by 3.2% in 2018, with a similar rise slated for 2019.
In June 2019 the board decided to hold its benchmark interest rate at 4.25% for the 14th consecutive month to maintain its “slightly expansionary” monetary stance after identifying the levels of internal and external risk. According to a survey of leading economists undertaken by the bank, expectations are for just one rate rise in 2019, possibly in October. While an increase of 25 basis points is likely in the latter half of 2019, analysts also forecast a further hike of 25 basis points in 2020, to 4.75%. This is what Juana Tellez, head economist at BBVA Research, describes as the country’s “long-term neutral level”. The rate news is positive for the economy overall, as expansive monetary policy is expected to continue for a longer period than expected in the absence of external shocks. The IMF describes the country’s monetary policy as being “moderately accommodative to support economic recovery”.
While inflation and interest rates are being kept in check, there are still concerns over the devaluing peso. On June 5, 2018 the peso was trading at COP2853 to $1 and by June 5, 2019 it was valued at COP3306 to $1 – a decline of 15.9%. Escalating trade tensions between the US and China since 2018 have led global investors to seek safer assets denominated in dollars, withdrawing from many emerging markets and harming currencies in the process. However, a Colombia-specific worry some investors have is the country’s commitment to fiscal reform, evidenced by the March 2019 decision to raise the allowable deficit rate for the year to 2.7%.
In the “Global Competitiveness Report 2018” by the World Economic Forum, Colombia ranked 60th overall out of 140 countries. Although the country slipped three places in the absolute rankings since 2017, its nominal score improved by 0.1 points to 61.6 out of 100. This suggests Colombia must work to boost its score in the face of competition from emerging market rivals. India, for instance, leapfrogged Colombia, climbing from 63rd to 58th in the rankings by increasing its score by 1.2 points. The Philippines, meanwhile, moved up 12 places to 56th, thanks to an improvement of 2.3 points on its 2017 position. In almost all of the indicators – such as institutions, infrastructure, macroeconomic stability, human capital, labour market, financial system, market size, business dynamism and innovation – Colombia performed at or above the Latin America and Caribbean average. The scores on many of these indicators were also equal to or higher than the average for Colombia’s income group of upper-middle income. Its scores on health (placing the country 35th out of 140 nations), market size (37th) and business dynamism (49th) rank high on a global scale, but Colombia’s overall average is dragged down by its state of infrastructure (ranked 83rd globally), ICT adoption (84th) and the strength of its institutions (89th).
If these last three rankings are lifted, as they have been since previous reports, there are hopes that Colombia’s overall global competitiveness score can make significant gains in the coming years. The Duque administration is driving to continue the ambitious 4G road programme and increase transparency in institutions after the region-wide corruption scandal involving construction firm Odebrecht of Brazil shook investor confidence. These moves should improve Colombia’s overall rank and attract greater amounts of FDI as a result.
Meanwhile, in the World Bank’s “Doing Business 2019” report, Colombia is ranked 65th out of 190 countries in terms of its overall score for ease of business. The country improved on its 2018 score by 0.2 points, bringing it to 69.24 out of 100 on the 2019 index, where top-ranked New Zealand scored 86.59. However, Colombia fell six places in the rankings despite improvements in its nominal score, due to moves from other midranked countries. Colombia performed well above the average for Latin America and the Caribbean, which had an average score of 58.97, and above both the largest economy in the region, Brazil (60.01), and neighbouring Peru (68.83).
The World Bank uses the example of Colombia to illustrate how variances within countries are often so great that they can resemble economies on opposite ends of the ranking. “For starting a business, for example, one-third of Colombia’s cities performed similarly to Austria, Germany and Poland – all OECD high-income economies. However, the number of procedures required in the city of Inírida (16) is exceeded by only two of the 10 worst-ranked economies globally (namely Venezuela and Equatorial Guinea, with 20 and 16 procedures, respectively),” the report said. For individual factors, Colombia tied for first place with Australia when it came to minimum capital requirements to start a business. It also performed well for getting credit (third globally) and protecting minority investors (15th), and relatively well for resolving insolvency (40th). It performed less favourably on trading across borders (133rd), paying taxes (146th) and enforcing contracts (177th).
In a separate analysis published in October 2018, the World Bank cited Colombia as an example of a country “reforming their business regulations to stimulate the private sector and spur economic growth”. This translated into the measures of getting electricity, registering property and protecting minority investors all rising by one place in 2019.
The categories posting the most notable falls were dealing with construction permits and trading across borders, both of which dropped eight places in the 2019 rankings. The fall of the latter was due to the increase in the time required to inspect export goods by Customs authorities, measures specifically designed to combat the illicit drug trade. The former’s drop was related to red tape involved in the social and environmental impact studies of certain projects, as well as irregular grants of regional construction licences, particularly in Cartagena.
Other evaluations that the international community follow closely are Colombia’s credit ratings, given that foreign investors are the primary holders of the country’s public debt. While Fitch adjusted its outlook for Colombia from stable to negative in May 2019, Moody’s revised its forecast upwards from negative to stable, maintaining a “Baa2” rating. Although some observers have noted concern over the lack of commitment to fiscal targets, the IMF stated in its Article IV document that in the face of external challenges – particularly the economic burden of the influx of Venezuelans – it “supported the use of flexibility within the [fiscal] rule to accommodate related spending, while preserving the integrity of the fiscal anchor and the medium-term structural balance objective”.
A crucial part of determining global rankings and credit ratings is evaluating a country’s trade environment. Colombia operates under a number of free trade agreements, including one with almost all countries in South America. It has been part of the Andean Community since 1969 and, per an agreement between the Southern Common Market ( Mercosur) and the Andean Community, Colombia has had tariff-free access to Brazil, Argentina, Paraguay and Uruguay since 2005. Colombia is also part of the Pacific Alliance alongside Chile, Peru and Mexico. The US-Colombia Trade Promotion Agreement, for its part, came into force fairly recently in May 2012.
In June 2018 Ildefonso Guajardo Villarreal, the former minister of economy for Mexico, told reporters at a press conference with former Colombian foreign minister María Ángela Holguín Cuélllar that Colombia had made a formal request to join the 11-member Comprehensive and Progressive Agreement for Trans-Pacific Partnership. However, there has been no official announcement regarding Colombia’s ascension to the trade pact as of June 2019.
According to the central bank, Colombia exported $44.32bn worth of goods in 2018, a rise of 11.7%. Of the total, $29.07bn was fuel ($16.77bn) and non-fuel ($12.3bn) commodities. Prevailing global trends point to a slowdown in the demand for commodities, which will lead to an extended period of lower prices. This will have a negative effect on Colombia’s natural resource-focused exports, bringing lower foreign currency inflows as a result. Non-traditional exports, for their part, including output from the mining and manufacturing sectors, accounted for $10.72bn, while all others represented $4.23bn. In its 2018 World Investment Report, the UN Conference on Trade and Development (UNCTAD) named Colombia in the top-25 exporting developing economies by global value chain participation rate, ranking 19th in gross exports.
Colombia’s largest trading partner is the US, which received 26.5% of the county’s exports in 2018. Colombia, in turn, is the US’ third-largest export market in Latin America, after Mexico and Brazil. China is the second-biggest recipient of Colombian exports, taking 9% in 2018, followed by Panama at 8.6%. Colombia’s fasting-growing export market is India, however, which experienced a rise of 96% in purchases that year to $548.1m, elevating it to the country’s 15th-largest trade partner.
Noting sluggish non-oil exports, the IMF predicts exports to total $43.15bn in 2019, a 2.6% decrease from 2018. This is broken down into estimates for traditional commodities of coffee, crude oil, coal and nickel at $27.26bn, a 3.9% contraction on the previous year; $11.39bn for non-traditional exports; and $4.4bn for others. The latter two represent growth of 6.25% and 4.02%, respectively.
Imports expanded by 12.2% in 2018, a significant increase from the 2.3% growth registered in 2017. Colombia will continue experiencing import growth, with IMF forecasts of a 4% rise in 2019 and 6.3% in 2020 – higher than the 10-year average of 3.6%. This growth in imports can be explained by increasing domestic demand across the categories of consumer, intermediate and capital goods.
Total imports amounted to $49.63bn in 2018 and are forecast to reach $51.6bn in 2019, $54.85bn in 2020 and $66.26bn in 2024. As a proportion of GDP, imports equalled 14.9% in 2018 and are forecast to be 15.3% in 2019. As a result of a reduction in traditional exports and growth in imports, Colombia’s trade deficit is projected to be $13.26bn in 2019, a jump of 4.8% over 2018.
Colombia has become an increasingly attractive place both regionally and internationally for investors, who are drawn by the country’s abundant natural resources, sizeable domestic market, business-friendly policies and free trade zones. However, after FDI growth of 18.1% in 2016 and a steady performance in 2017, FDI in 2018 contracted by 20.4%, dropping from $13.84bn to $11.01bn. The largest sectors by share of FDI in 2018 were oil (21.43%); financial services (18.02%); mining and quarries (15.54%); transport (14.08%); and businesses, hotels and restaurants (12.02%).
Investment forecasts by Bancolombia are positive for 2019, with expected growth of 5%. The firm foresees productive investment being “the engine of economic activity in 2019”, which reflects the increased confidence of businesspeople in the country about future economic growth (see CEO Survey). However, investment inflows from abroad are dependent on many factors, such as the progress of tax reform, the overall socio-political environment and continued consumer demand. Spanish bank Santander highlights infrastructure as a key sector of interest for FDI in 2019 in light of the government’s 4G plan. The bank also tracks FDI flows on a city basis. Bogotá, for example, is one of the key recipients of financial services and communications FDI, with inflows of $16.77bn over the last 10 years. This has allowed the capital to consolidate itself as a leading business centre in the region.
In 2018 UNCTAD named Colombia one of the world’s top-25 FDI destinations. Spain and the US remain Colombia’s leading investors, bringing in $2.6bn and $2.2bn, respectively, in 2017. Dynamics are changing, however, and non-traditional source markets are coming to the table. Chinese investment is picking up in Colombia, which has typically been one of the less popular markets in Latin America for the world’s second-largest economy. With a focus on infrastructure and communications, Chinese state-owned enterprises such as the Capital Airports Holdings Company (CAHC) are investing in a number of locations around Colombia. CAHC is operating a concession at Quibdó Airport in the impoverished and isolated Pacific region of Chocó, a department previously controlled by FARC. Investment in the small town could help secure China’s position as a primary trade partner for the underdeveloped regions of Colombia, which are strategically important for their minerals, forestry and agriculture. Furthermore, in December 2018 Chinese telecoms provider ZTE launched a 5G Innovation Research Centre in Bogotá with the goal to establish 5G in Colombia over the next three to five years.
In their second quarter report for 2019, Bancolombia states that it expects the labour market to remain challenging, with unemployment in the cities staying steady at relatively high levels. The firm forecasts that unemployment at double digits will be the norm rather than the exception over the medium term, projecting an average unemployment rate of 10.7% between 2019 and 2023 in urban areas, up from the 2014-19 average of 10.2%.
However, by the end of 2019 it is expected that unemployment in the country as a whole will fall below the 10.8% seen in 2018, mainly due to more positive growth projections for construction and industry, with a resulting heightened demand for labour in those sectors of the economy.
The inactive population – a term used to describe working-age people who do not have a job and are not seeking one – has risen between February 2018 and February 2019, although this trend is expected to reverse in the latter half of 2019. The primary reasons for why a person is inactive include family responsibilities, education and collecting a pension. There has been a sharp fall in the inactive population that is in school since May 2016, which suggests a rise in the number of students entering the workforce sooner than expected, possibly because of financial pressures. Similarly, pressure from pension payments not covering all necessary expenses is expected to drive up the proportion of people who are over 60 years old who seek employment, leading to an even more crowded worker pool. Since 2017 an average of 20% of pensioners – some 1.4m people – have been active in the labour force.
As of February 2019, 22.07m people in the country were employed, 2.94m were unemployed and 14.15m were inactive. For those seeking work, Bancolombia points out that the success rate for jobseekers during the first month of their search is relatively low, at 9.3%, and 30.9% of applicants do not find a job after 13 months of searching.
In the “World Digital Competitiveness Ranking 2018” report by the IMD World Competitiveness Centre, Colombia rose six places to be 58th out of 63 countries. The overall score is comprised of knowledge, technology and future readiness categories, where each has three sub-factors that are studied. Under the knowledge factor, Colombia ranked 57th in talent, 45th in training and education, and 57th in scientific concentration. Each of the nine sub-factors looks at four or five measures, and of these, weaknesses were highlighted in contract enforcement and enforcement of intellectual property rights. Knowledge transfer and attitudes towards globalisation were also low. However, the country has a positive pupil-toteacher ratio in tertiary education and fairly high educational attainment by women. To address some of the underlying issues impeding human capital development, a central part of the PND looks to support education to cultivate the necessary talent required by the economy (see Education chapter).
The Exile Economy
Further pressure on the labour market stems from the high number of Venezuelans in the country, which is also placing strain on public services such as schools and hospitals. The impact is felt most acutely in Colombian border cities, such as Cucutá in the department of Norte de Santander. Many migrants participate in the informal economy there, sending money back to relatives if they can. There is also evidence of Venezuelans working not for a salary, but in exchange for food or accommodation. Indeed, areas along the Venezuelan border have higher unemployment than the rest of the country, at around 16%.
It is not just border regions that are being affected by migrant inflows, however. Of the estimated 1.2m Venezuelans living across Colombia, the majority of them are of working age. Some employers prefer to hire these refugee workers over Colombian nationals, most likely due to them accepting lower wages and longer hours. According to the National Administrative Department of Statistics, 70% of the approximately 198,000 new jobs created in February 2019 were filled by Venezuelans who a year ago were not living in Colombia. With the Organisation of American States forecasting the exodus of Venezuelans from their country to reach 8.2m by late 2020, it is uncertain how Colombia – as the largest recipient country – and its job market will be able to absorb all those looking for work.
Growth of the Colombian economy will be determined by which side of the scale advances further in the short term: strong consumer spending and increased investment in the construction sector due to the ongoing 4G road programme, or a deepening current account deficit and strained labour market due to the influx of Venezuelan refugees. As the country tries to advance its international competitiveness to secure greater investment and job growth, the government must battle inflation, unemployment and a fluctuating peso. Still, if the current PND is implemented successfully, the Duque administration is likely to leave behind a stronger Colombia with increased opportunities for all.
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