Colombia Country Risk Report

Providing comprehensive data and in-depth analysis of political, financial and economic risk.

Report includes: BMI's Core Views, 10-year Forecasts, BMI's Economic Risk Index, Political Stability and Risk Index, Long-term Political Outlook, Operational Risk Index, SWOT Analysis and Structural Economic Sections

Why you should buy this report

  • Understand and measure the political, business environment and operational risks to your company
  • Gain insight on emerging trends that could support, strengthen or disrupt your activities in the market
  • Benefit from 10-year macroeconomic forecasts and insight into the structural characteristics of the economy
  • Get the long-term political outlook and explore possible scenarios for change
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Colombia Country Risk Report
Product Price
$1,195.00

Core Views:

  • Persistent weakness in benchmark crude prices will continue to undermine real export growth and fixed investment, helping to underpin our view for structurally slower growth over the next several years.

  • We also anticipate a slowdown in real private consumption growth as consumers are hit hard by high inflation, rising interest rates and a significant sell-off in the exchange rate.

  • Hydrocarbon sector weakness will also weigh on Colombia's balance of payments position. Faltering oil prices and production will temper investment into Colombia and cool export growth.

  • Meanwhile, slower oil production growth combined with increasing pressure to spend on social programmes will feed through to fiscal slippage in the years ahead. While the country is well positioned to withstand the storm, with a relatively low external debt burden and a sizeable stock of foreign reserves, the potential for deterioration in the country's macroeconomic buffers will temper investor perceptions of Colombia's sovereign creditworthiness.

  • Although the government and Fuerzas Armadas Revolucionarias de Colombia are on the cusp of a peace accord, the splintered nature of the left-wing insurgent group will ensure that the deal will only slowly improve the security environment.

Major Forecast Changes:

  • Given still accelerating headline price growth, we have revised up our 2016 average inflation forecast to 6.9%, from 5.8% previously. We have also revised up our end-2016 policy rate forecast to 7.00%, from 6.50% previously, as Colombia's Banco de la Republica has hiked more aggressively than we anticipated in recent months.

Key Risks:

  • A failure to continue improving its business environment could prolong Colombia's growth slowdown, as investors look to more favourable destinations for investment in light of the country's high wage and non-wage costs and insufficient infrastructure. We believe this will be headwind to growth in the medium term, but it could become a more structural, long-term issue if not addressed in the next few years.

Macroeconomic Forecasts (Colombia 2014-2017)
2014 2015 2016f 2017f
e/f = BMI estimate/forecast; Source: National Sources/BMI
Real GDP growth, % y-o-y 4.4 3.1 2.5 2.9
Nominal GDP, USDbn 378.3 291.7 289.6 323.4
Consumer price inflation, % y-o-y, eop 3.7 6.8 4.6 3.5
Exchange rate COP/USD, eop 2,376.51 3,174.50 2,900.00 2,850.00
Budget balance, % of GDP -2.6 -3.1 -3.9 -3.7
Current account balance, % of GDP -5.2 -6.5 -5.8 -5.6
Executive Summary
5
Core Views
5
Major Forecast Changes
5
Key Risks
5
Chapter 1: Economic Outlook
7
SWOT Analysis
7
BMI Economic Risk Index
7
Economic Growth Outlook
8
Stabilising Oil Prices & Capital Inflows Will Drive Recovery
8
GDP By Expenditure Outlook
9
TABLE: GDP GROWTH FORECASTS
9
TABLE: PRIVATE CONSUMPTION FORECASTS
9
TABLE: GOVERNMENT CONSUMPTION FORECASTS
10
TABLE: FIXED INVESTMENT FORECASTS
10
TABLE: NET EXPORTS FORECASTS
10
Monetary Policy
11
Hiking Cycle Peaked
11
Monetary Policy Framework
12
TABLE: MONETARY POLICY FORECASTS
13
External Trade And Investment Outlook
14
Current Account Will Remain Tied
Current Account Will Remain Tied
To Oil
14
Outlook On External Position
15
TABLE: CAPITAL & FINANCIAL ACCOUNT BALANCE
15
TABLE: TOP 5 GOODS EXPORTS
16
TABLE: TOP 5 GOODS IMPORTS
16
Fiscal Policy And Public Debt Outlook
17
Weak Oil Revenues Will Underpin Deficits
17
TABLE: CURRENT ACCOUNT BALANCE FORECASTS
17
Structural Fiscal Position
18
TABLE: FISCAL AND PUBLIC DEBT FORECASTS
19
Currency Forecast
20
COP: Pace Of Appreciation To Moderate As Oil Takes A Breather
20
TABLE: BMI CURRENCY FORECAST
21
Chapter 2: 10-Year Forecast
23
The Colombian Economy To 2025
23
Structurally Weaker Growth Following Oil Bust
23
TABLE: LONG-TERM MACROECONOMIC FORECASTS
23
Chapter 3: Political Outlook
27
SWOT Analysis
27
BMI Political Risk Index
27
Domestic Politics
28
Ceasefire Agreement Signals Peace Process Nearing A Close
28
TABLE: POLITICAL OVERVIEW
28
Long-Term Political Outlook
29
Many Structural Challenges Ahead
29
Chapter 4: Operational Risk
31
SWOT Analysis
31
Operational Risk Index
31
Operational Risk
32
TABLE: OPERATIONAL RISK
32
Market Size and Utilities
33
TABLE: LATIN AMERICA - MARKET SIZE AND UTILITIES
34
Labour Costs
37
TABLE: LABOUR REGULATIONS GOVERNING FLEXIBILITY OF WORKFORCE
38
Chapter 5:BMI Global Macro Outlook
41
Global Macro Outlook
41
Brexit Risk Casts A Long Shadow
41
TABLE: GLOBAL ASSUMPTIONS
41
TABLE: DEVELOPED STATES, REAL GDP GROWTH, %
42
TABLE: EMERGING MARKETS, REAL GDP GROWTH, %
43
MACROECONOMIC FORECAST
45
TABLE: MACROECONOMIC DATA & FORECASTS
45

Assess your risk exposure in Colombia with our 100% independent forecasts assessing the pace and stability of this key market. Backed by trusted data from BMI Research's 52 million data point economic forecast model, this report will allow you to measure political, economic, business environment and operational risks in Colombia with confidence.

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  • Delivery of the report in print and PDF
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