Colombia’s economic growth is on the rise and we want to give answers as to why. In this all-inclusive Colombia economic overview, we will give you a clear outlook on the Colombia economic system. We’ll address:
- Up-to-date Colombia economic growth statistics
- Major industries in Colombia today
- Colombia’s unique Orange Economy
- Economic challenges in Colombia
- Colombia foreign investment
- And so much more!
Before we jump in, be sure to take a look at our report on a marquee Colombia sector, the Orange Economy!
How is the Colombian Economy?
Even though the media has given Colombia a bad rep for narcotrafficking and poor infrastructure, Colombia is actually a promised land for foreign investment.
With an astounding 49 million inhabitants, Colombia hosts a massive Latin American market. But before we go any further, let’s ease your mind and take a quick look at some statistics for this economic overview:
Colombia GDP Ranking & GDP Per Capita
A promising market economy, Colombia is expected to continue growing in the foreseeable future.
Based on 2018 statistics from the World Bank, here are some fast facts about the Colombia economic system:
- Currency Unit: Colombian Peso
- GDP: 330.228 billion USD
- GDP per capita: 7,698.40 USD
- GNI per capita: 14,170 PPP USD
- GDP growth rate: 3.3%
- Gross National Income: 695.1 billion PPP dollars
Like we mentioned before, Colombia’s economy ranks 4th in Latin America when measured by Gross Domestic Product (GDP). The country follows closely behind the three GDP leaders: Brazil, Mexico, and Argentina.
But that’s not all. Life satisfaction in Colombia is also on the rise, which leads us to believe that the health of the economy is as well!
Life Satisfaction in Colombia
Not only is the Colombia GDP ranking a promising sign, but the country also boasts an upper middle-income group. This is significant because Colombia has made extensive efforts in the past decade to lift communities out of poverty.
In fact, since 2002, poverty rates have fallen from 50% to 27%, with extreme poverty falling from 18% to 8%.
Both local and federal governments have gone great lengths to pass country-wide reforms like Law TIC that help strengthen the Colombia GDP ranking.
Because of these macroeconomic and social policies, life satisfaction is now above the OECD average. Not to mention their efforts have also formalized and improved Colombia’s business environment.
With that, let’s talk about some of Colombia’s major industries.
Major Colombian Industries in 2020
It is no secret that Colombia is stock-full of natural resources. Let’s see how these industries fare in this Colombia economic overview.
Since the country is located in such a nutrient-rich environment, raw commodities drive Colombia’s economy.
Colombia’s Largest Exports
Along with the international trade of natural resources, there are many other Colombian industries you should pay attention to in 2020. These include:
Colombia’s Strongest Industries
- Colombian petroleum industry
- Recreational tourism
- Medical tourism
- Colombian music industry
- Cosmetics and beauty products
But the most important Colombian industry of them all is the new focus on the creative industry.
This leads us to the very core of the Colombia economic system: orange economy.
Colombia’s Orange Economy
Like many countries around the world, Colombia hosts a free-market economy.
But did you know Colombia actually has an orange economy too?
And we’re not talking about orange groves and citrus fruits. Instead, we’re referring to an entire economic movement towards creativity and innovation!
Creativity and Colombia Economic Growth
In 2018, Colombian President Iván Duque proposed a plan for a new economic model centered around intellectual property, creativity, and the arts.
This is fantastic news for the software, advertising, digital, and multimedia industries because it opens the gates for both local and foreign companies to enter Colombia’s economy via the Internet.
And what’s more?
Now that Internet users make up 43.4% of the population, Colombia has begun to shift its market towards a more digital agenda.
Simply put, the government doesn’t want the Colombia economic system to rely solely on raw commodities like petroleum and coffee. That is why the country has begun investing in the Colombia orange economy.
Sounds like a pretty good plan to maintain a strong Colombia GDP ranking, right?
Before we dive into the world of foreign investment opportunities in Colombia, let’s talk about some economic issues in Colombia.
Economic Challenges in Colombia 2020
Like most countries, Colombia has its fair share of challenges. To give a complete Colombia economic overview, we need to highlight a few economic challenges, which include:
- Inadequate infrastructure
- Precarious security situation
- Dependence on primary exports (making it vulnerable to market shifts in commodities)
Many of these challenges are linked to Colombia’s 50-year civil conflict – a devastating period in the country’s rich history.
However, peace agreements between the government and Colombian rebels have positively influenced the economy as conflict slowly dwindles and frees Colombia from civil unrest.
Along with the push towards an orange economy, investors have seen an impressive overall improvement in the Colombia economic system since 2016.
Current Foreign Investment in Colombia
Did you know that Colombia is one of the United States’ closest allies in Latin America?
In fact, the two countries are so close that the U.S. gave nearly $490 million in 2016 to help end the civil conflict and aid the country’s transition to peace.
Since the U.S. and Colombia are such good allies, foreign investment in the country is rather popular.
And that’s not all!
According to a 2017 report from the United Nations Conference on Trade and Development, Colombia is among the top 25 countries for foreign direct investment.
Business Opportunities in Colombia in 2020
So what are the best business opportunities in Colombia?
Raw commodities like oil and mining are still the primary target of many investors, but investing in Colombia real estate is also very popular. This is due to Colombia’s massive tourism industry.
But wait, there’s more…
Now that the orange economy is surging through the veins of Colombians everywhere, we can expect more money to be funneled into creative industries.
Think: art, film, music, software innovation, and digital multimedia platforms.
As you can see, Colombia’s economic growth is on the rise and business opportunities are diverse and plentiful.
Ready to Invest in Colombia?
Feel secure about your decision to enter the Latin American market and want to start building a global strategy?!
Message our expansion strategists at firstname.lastname@example.org to see how we can help you enter new markets in Latin America.
Before you go, please be sure to check out our latest report on the Colombian Orange Economy!