Colombia’s economy has had a quiet year compared to its neighbors. Next to the financial mess of Venezuela and the gleaming prospects of Peru, Colombia did not make much noise in the world of international financial news.
But that does not mean that the country has nothing to look forward to. After GDP growth of 4.5 percent in 2013, down from 4.8 percent the previous year due to weak overseas demand and a sluggish manufacturing sector, but still relatively solid. Colombia is headed for another year of decent growth in 2014.
Trading Economics predicts the economy will expand by 3.07 percent, while the Central Bank of Colombia pegs growth at 4 percent. The BBVA Research Center predicts it will go up 5 percent.
But Colombia’s economy, mostly driven by oil and mining, has taken a hit from falling overseas demand: Colombia grew 6.6 percent in 2011, but has steadily declined since. That’s because its biggest trading partners, chiefly the U.S., are still on the way to a strong recovery.
“The economy will grow this year at similar levels to 2012, and that’s decent growth considering other countries are expanding below that level,” central bank Chief José Darío Uribe said.
Private consumption will speed up in the new year, according to BBVA Research, along with investment. The bank forecasts that consumption will be up 4.4 percent, and fixed investment will grow 7.1 percent.
Inflation will drop from the current 2.14 percent to 1.69, according to Trading Economics — a far cry from other Latin American countries with economies of similar size like Argentina, which has 25 percent inflation, and Venezuela, which having surpassed 30 percent tops the list of countries with exploding prices in the region.
As with many other cases in the region, unemployment is the weak spot of the Colombian economy. 2013 ended with a 8.48 percent rate, with a slight rise in the last quarter. Even though unemployment percentages are larger than in other countries, they are down from Colombia’s historical high of 17.48 percent in 2012.