The country has a population of 47.6 million (2012), with nearly 50 percent aged 27 or under. The population is highly urbanised and clustered predominantly in large coastal cities.
Colombia has in the past experienced some internal issues that caused political instability, however considerable progress has been made since 2002 during the administration of former President Uribe and has continued with the current administration under President Santos to mitigate these risks. This, coupled with stability in the country's financial systems has been conducive to economic growth.
Colombia's informal economy has been estimated to be between 20 percent and 40 percent of GDP. With such a large portion of total economic activity lying outside the control of Government officials it complicates policy matters.
Over the past several decades Colombia has pursued a broad range of structural and institutional reforms. Colombia's most notable regulatory improvements have been in the areas of starting a business, paying taxes, protecting investors and resolving insolvency. Colombia's ranking on the ease of doing business rose from 79 among the 175 economies included in 2006 to 45 among the 185 included in 2012.
In 2012, New Zealand's total exports to Colombia was NZ$13.3 million, which has remained relatively constant over the last three years. New Zealand's largest exports to Colombia include electrical and electronic equipment, machinery, medical apparatus and seafood. Colombia has expressed an interest in the Trans Pacific Partnership (TPP), the preferential trade agreement of which New Zealand is a member.
Colombia is a founding member of the Pacific Alliance, signed in June 2012, along with Mexico, Peru and Chile. The Pacific Alliance is an economic integration initiative between the four countries. New Zealand is an observer which is one of the mechanisms in which New Zealand can engage with Colombia given they are not members of APEC or TPP and can open doors for New Zealand by being part of one of the world's most dynamic economic blocs.
Facts about Colombia's economy
- In 2012, the economy expanded 4.4 percent. This healthy growth will continue into 2013, with 4.5 percent growth forecast. Improvements in security have drawn more investors to Colombia. A surge in spending on infrastructure and record levels of foreign direct investment are driving the economy. A process of fiscal consolidation, along with tighter monetary policies, prevents even higher rates of growth.
- Growth of GDP averaged about four percent in 2004-2009, boosted by private investment and oil exports. During this period the poverty rate steadily declined to 49 percent (down from 57 percent in 2002).
- Inflation is forecast to be 3.0 percent in 2013. Credit had been growing at more than 20 percent each year, but the pace has slowed sharply as monetary policy has been tightened.
- The 2013 World Bank Doing Business report ranks Colombia 45th out of 185 countries for ease of doing business.
- The services sector makes up approximately 50 percent of Colombia's GDP of US$330 billion.
- Agriculture is a mainstay of the Colombian economy. The sector produces coffee, sugar, bananas, cotton and meat, and employs 18 percent of the workforce.
- Colombia exports around US$47 billion of products and services each year. Oil is Colombia's top export product (followed by coal and coffee), accounting for about 25 percent of Government revenues.
- Mining is also one of Colombia's most important sources of exports, and the country is the world's fifth largest exporter of coal. Prospects for the next couple of years are bright as domestic demand strengthens.
- Colombia's inwards foreign direct investment (IFDI) reached a record high of US$ 16 billion in 2012, up from less than US$ 2 billion in 2003. Most IFDI over the last ten years has been in the oil and mining sectors, with commerce and tourism also attracting investment recently. Over the last 20 years the United States has been the single largest investing country.
- The Colombian government expects up to US$50 billion in investment in mining and oil during the next decade. A sharp increase in production of both coal and oil is anticipated.
(Source: Euromonitor and Emerging Market Information Service.)
Two way trade information
Opportunites for New Zealand companies
Agriculture is important to both New Zealand and Colombia, accounting for 6.7% and 9% of GDP respectively. President Santos has pointed out that New Zealand, as a leader in production and marketing of dairy products, is a key partner for the development of this sector in Colombia with an emphasis on improving productivity and competitiveness.
The Colombian Government has recognised the need for its agricultural sector to become more competitive and improve farm management skills. New Zealand is regarded as a model particularly now that there is a growing awareness that Colombian geography favours pastoral farming.
Colombia's most valuable crop is coffee, with output of bananas, rice, tobacco and sugarcane also economically significant. Pasture based farming is also important in Colombia where there are 25 million head of cattle. Meat and dairy is produced for domestic consumption and export.