Our comprehensive assessment of Colombia's operating environment and the outlook for its leading sectors are formed by bringing together a wealth of data on global markets that affect Colombia, as well as the latest industry developments that could impact Colombia's industries. This unique integrated approach has given us an impeccable track-record for predicting important shifts in the markets, ensuring you’re aware of the latest market opportunities and risks in Colombia before your competitors.

Country Risk

Colombia Country Risk

BMI View:

Core Views:

  • With the oil sector set for slower growth as global crude prices plunge, this will prompt larger net exports deficits and weigh on gross fixed capital formation, such that we anticipate slower growth over the next decade than in the last.

  • Hydrocarbon sector weakness will also weigh on Colombia's balance of payment position. Indeed, 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 and infrastructure development will feed through to fiscal slippage in the years ahead. While the country is well positioned to withstand the storm, with low external debt and a sizeable stock of foreign reserves, the potential for deterioration in the country's macroeconomic buffers will temper investor perception of...

To read the full article Register for Free or Login

Colombia Operational Risk Coverage (9)

Colombia Operational Risk

BMI View:

BMI View: Colombia offers considerable potential as an investment destination, with one of the largest populations in Latin America and a sizeable economy based on hydrocarbons and mining. Reforms enacted by the administration of President Santos have improved the operating environment, streamlining bureaucratic procedures, providing incentives for investment, and lowering trade barriers. Ongoing peace negotiations with the Revolutionary Armed Forces of Colombia are also improving the security outlook. Nevertheless, Colombia continues to pose significant challenges to investors, as the rule of law remains weak, facilitating criminal and terrorist activity and allowing corruption to flourish. In addition, trading costs remain extremely high due to an inadequate transport network, and burdensome employment regulations further weigh on profit margins. Consequently, Colombia is a regional underperformer in...

To read the full article Register for Free or Login

Colombia Crime & Security

BMI View:

BMI View: Despite significant improvements in the last decade, Colombia still presents considerable security risks for foreign business travellers, expatriate workers and tourists in comparison with other Latin American countries. There are significant differences between the main cities and the more isolated rural areas, both in terms of the type and intensity of security risks. Crime is comparatively high in the main cities, while terrorist attacks are more targeted towards critical infrastructure such as oil pipelines. Colombia receives a score of 34.6 out of 100 in the BMI Crime And Security Risk Index, placing 30th out of 42 Latin American countries in the regional comparison, between...

To read the full article Register for Free or Login

Colombia Labour Market

BMI View:

BMI View: Colombia offers a large, urbanised and relatively healthy labour force which is particularly suited to businesses in labour-intensive, low skilled sectors. The country's labour market also benefits from a strong tertiary education sector which improves the skill set of a segment of the labour force. However, high labour taxes and social security contributions, powerful trade unions which have driven significant labour strikes in recent years, and poor school enrolment rates, weigh on Colombia's overall performance. Colombia therefore receives a total Labour Market Risk score of 53.7 out of 100, ranking the country 19th out of 42 states in the Latin...

To read the full article Register for Free or Login

Colombia Logistics

BMI View:

BMI View: Colombia's large and growing economy, as well as its considerable population, requires a well developed logistics network in order to sustain growth. The country offers an extensive and reliable utilities supply, and its ports enable strong connections to maritime trade routes, facilitating speedy trade times. However, the expansion of the mining and oil and gas industries has placed pressure on Colombia's utilities sector, particularly the security of the country's water supply. In addition, while growth of these sectors has helped to develop Colombia's transport network, creating extensive road, rail and sea connections, all would benefit from further...

To read the full article Register for Free or Login

Colombia Trade & Investment

BMI View:

BMI View: Colombia offers one of the largest markets for investment in Latin America, with an economy driven by the hydrocarbons and mining sectors, and a significant consumer market which is benefitting from rising incomes. Economic reforms, bureaucratic efficiency, and the ongoing peace process with the Revolutionary Armed Forces of Colombia (FARC) have attracted increasing foreign direct investment (FDI) inflows. In addition, trade barriers are few and the government has pursued a policy of making free trade agreements with key economic partners. Nevertheless, significant risks remain to be overcome by investors, mainly stemming from the legacy of internal conflict, which has resulted in a weak rule of law and widespread institutional corruption. Nevertheless, in the overall BMI...

To read the full article Register for Free or Login

Colombia Industry Coverage (19)

Agribusiness

Colombia Agribusiness

BMI View:

BMI View: Colombia's agricultural sector will face a number of challenges in the medium term. Key export crops - such as coffee and cocoa - have underperformed in recent years owing to a lack of investment in infrastructure and outbreaks of disease. Although regeneration work is under way, it will take time to bear fruit. The strength of the Colombian peso against the US dollar is also posing challenges for the agribusiness sector, as the competitiveness of Colombia's exports is being eroded. Finally, there is still unrest among dairy, livestock and grain producers who fear that the entry into force of the Colombia-EU free trade agreement will further erode their profitability. The Ministry of Agriculture has taken steps to...

To read the full article Register for Free or Login

Autos

Colombia Autos

BMI View:

BMI forecasts vehicle sales in Colombia to increase 6% in 2014 on the back of steady improvements in the economy and low base effects from declining sales in 2013. We expect this positive momentum to continue into 2015, predicting another year of 6% growth. In terms of Colombia's vehicle production, we forecast growth of 4.5% and 4.0% in 2014 and 2015 respectively.

In April 2014, the Colombian government announced plans to cut tariffs on imported autos components in a bid to make domestically-produced cars competitive with imported vehicles. The domestic autos industry is relatively nascent, relying chiefly on imported components and CKD assembly, with little high value-added manufacturing taking place in the country. BMI believes that, while the reduced tariffs may help reduce costs somewhat, a number of structural inefficiencies remain in the market, hindering automakers. These will therefore be unlikely to compete...

To read the full article Register for Free or Login

Commercial Banking

Colombia Commercial Banking

BMI View:

...
Commercial Banking Sector Indicators
Date Total assets Client loans Bond portfolio Other Liabilities and capital Capital Client deposits

To read the full article Register for Free or Login

Consumer Electronics

Colombia Consumer Electronics

BMI View:

BMI View: Peso depreciation is expected to result in a contraction of spending in the PC, AV and handset segments in 2015 - a downgrade on our previous forecast due to a weaker outlook from our Country Risk team for Colombia. The medium-term outlook is significantly stronger however, with the exchange rate expected to stabilise from 2016, enabling the Colombian consumer electronics market to return to a robust growth ...

To read the full article Register for Free or Login

Defence & Security

Colombia Defence & Security

BMI View:

BMI View: Talks between the Fuerzas Armadas Revolucionarias de Colombia (FARC) and the Colombian government continue on. However, with little real progress made on this front, along with the scandal of the FARC capturing and subsequently releasing a military General, these are unlikely to be resolved in the near future. BMI expects that the defence budget and the subsequent increase in GDP will be used mostly to improve/maintain the Colombian government's military and security forces rather than for new procurements.

As one of the...

To read the full article Register for Free or Login

Food & Drink

Colombia Food & Drink

BMI View:

BMI View: Our real private consumption growth forecasts remain unchanged since last quarter, at 3.9% in 2015 and 3.7% in 2016. Earlier this year, we downgraded our growth forecast, as we expect lower global oil prices to negatively affect GDP growth over the coming years. The weak performance of the hydrocarbon sector, which accounts for around half of the country's exports, will weigh on real GDP growth and government revenues over the coming years. Tightening fiscal policy is likely to result in lower transfers and higher taxes. In addition, we expect inflation to accelerate in 2015, which will weigh on consumer confidence. Despite the country's fairly inflexible and costly labour market, the lack of bureaucracy involved in setting up a business and well developed financial markets continue to make Colombia an attractive investment...

To read the full article Register for Free or Login

Freight Transport

Colombia Freight Transport

BMI View:

Growth across the Colombian freight mix is set to remain relatively strong in 2015. This trend follows the news that Colombia's real GDP growth is poised for a robust expansion in the coming quarters, though cooling slightly from the 5.4% year-on-year (y-o-y) growth recorded in H1 2014. However, while Colombia will continue to outpace much of the rest of Latin America in the coming quarters, this will be in the context of modestly slowing real GDP growth.

This year we expect the port of Cartagena to see more muted y-o-y growth compared to recent years (between 2010 and 2012 inclusive, growth came in at double figures), but it will still outperform domestic rival the port of Buenaventura in terms of annual gains (4.50% compared to 3.31%, respectively). Rail freight will also see healthy growth of 7.00%, ahead of the road and air freight modes (5.23% and 5.00% respectively).

Headline Industry Data...

To read the full article Register for Free or Login

Information Technology

Colombia Information Technology

BMI View:

BMI View: The depreciation of the Colombian peso against the US dollar in 2015 is a drag on growth by raising the cost of imported devices and solutions and resulting in deferred purchases and substitution for lower cost alternatives. This negatively impacted our forecast, which we revised down again in the Q4 2015 update and now forecast a contraction of 20% in US dollar terms in 2015. However, with our in-house Country Risk team envisaging a stabilisation of the peso from 2016, we maintain a bright medium-term outlook, with strong economic performance and a supportive policy environment meaning it is expected to make Colombia...

To read the full article Register for Free or Login

Infrastructure

Colombia Infrastructure

BMI View:

BMI View: The government stimulus plan in Colombia called Pipe 2.0 presents an upside risk to our construction industry forecasts, particularly for the road subsector and the residential/non-residential building sectors. However, given the budget cuts in light of weak oil prices and reduced government revenue, we are sceptical over the government's capacity to fulfil this investment plan.

Key Trends And Developments

  • Should public spending from Pipe 2.0 materialise, it is transport infrastructure and housing...

To read the full article Register for Free or Login

Insurance

Colombia Insurance

BMI View:

BMI View: Colombia's insurance market is growing at a steady pace with premiums expanding at rapid clip year on year in local currency terms. The main drivers of the market include rising income levels and household spending, while a plethora of locally-based multinational insurers have been investing in product development and strengthening their distribution strategies. Going forward, we expect premiums to continue along this trajectory as an increasing number of multinational providers enter the market.

Colombia boasts one of the larger insurance sectors in Latin America, with the market expanding considerably over the past decade to include a number of new entrants from overseas, all of which bringing additional capital. In global terms, Colombia still ranks as a medium-sized market, however, which is a reflection of the fact that insurance penetration and density are both fairly...

To read the full article Register for Free or Login

Medical Devices

Colombia Medical Devices

BMI View:

BMI Industry View: The Colombian medical device market has benefitted from the country's increasingly political stability and GDP growth above the Latin American average in recent years. It now ranks fourth in Latin America and is projected to register the third fastest 2013-2018 CAGR in the region. Per capita medical device expenditure is low but continuing healthcare and regulatory developments will provide new growth opportunities for medical device companies in the long-term. Multinationals that already have a presence in the...

To read the full article Register for Free or Login

Mining

Colombia Mining

BMI View:

BMI View: Mining sectors across Central America and the Caribbean will see varying growth prospects in 2019. The region has significant untapped mineral potential, yet a range of business environments and operational challenges will lead to uneven growth. Overall, the mining sectors of Colombia and Panama will see the strongest longer-term growth, while Guatemala, and to a lesser extent Honduras, will underperform.

Colombia and Panama will outperform other countries in Central America and the Caribbean in terms...

To read the full article Register for Free or Login

Oil & Gas

Colombia Oil & Gas

BMI View:

BMI View : Colombia's energy sector is nearing an inflection point. While the past decade has witnessed strong production growth due to improvements in the business and security environment, we caution that the country will experience downward pressure on oil production over the longer term. The tendency toward smaller finds, as well as recent increases in pipeline attacks have begun to show signs of decreased investor interest in Colombia's resources, as witnessed in the 2014 licensing rounds. Furthermore, sustained lower oil prices have threatened the development of upstream and downstream projects by both national and international investors. Given...

To read the full article Register for Free or Login

Petrochemicals

Colombia Petrochemicals

BMI View:

BMI View: In the wake of the stagnant growth rates seen in Colombian petrochemicals industry over2014, reflecting poor domestic market performance, we expect a moderate improvement over 2015 due to strong overall economic growth. However we caution that the rate of petrochemicals consumption will see modest growth.

Growth in petrochemicals consuming industries such as the automotive and construction sectors has been strong, but has not benefitted the Colombian petrochemicals market. The automotive industry depends on imported kits and parts, which limits the amount of input from locally produced polymer...

To read the full article Register for Free or Login

Pharmaceuticals & Healthcare

Colombia Pharmaceuticals & Healthcare

BMI View:

BMI View: A growing burden of chronic diseases, along with the Colombian government's push toward improving its national healthcare system will ensure the country's retained appeal to multinational drugmakers and healthcare suppliers. Despite remaining concerns surrounding Colombia's counterfeit drug market, the country's overwhelming demand for medical access will keep health and medicine spending on a positive trajectory over the long term.

Headline Expenditure Projections

  • Pharmaceuticals: COP8,643bn (USD4.3bn) in 2014 to COP9,110bn (USD3.6bn) in 2015; +5.4% in local currency terms. Forecast revised upward from Q215 due to...

To read the full article Register for Free or Login

Power

Colombia Power

BMI View:

BMI View: A vast pipeline of power projects under construction and our forecast for sustained growth in power consumption over the coming decade support our positive outlook for Colombia's power sector. While hydropower will remain the dominant source of electricity in the country, we see upside potential for our growth forecast for gas-fired generation due to Colombia's cyclical exposure to dry weather. The resurgence of FARC's attacks against power infrastructure has increased the country's risk profile, but we maintain that a peace agreement will eventually be reached....

To read the full article Register for Free or Login

Retail

Colombia Retail

BMI View:

BMI View: With the fourth largest economy in Latin America, measured by GDP, Colombia's retail sector presents many opportunities for international and domestic retailers, as well as investors. Years of economically sound policy have lowered barriers to entry for international firms, and sustained economic growth has brought lower unemployment rates and higher levels of affluence for a significant portion of the population. However, lingering poverty levels, a deficient physical and transportation infrastructure, and the slow rate of non-cash payment integration into the economy continue to remain a hindrance to achieving full economic growth potential. Nevertheless, significant opportunities remain. In particular, the continuing fall of the informal sector's market share and the continuing rise of e-commerce and...

To read the full article Register for Free or Login

Shipping

Colombia Shipping

BMI View:

BMI View: The strong growth registered across Colombia's main ports in 2014 is set to continue over the course of 2015. The largest port in the country at Cartagena is set to see the largest rate of year-on-year (y-o-y) tonnage throughput growth in 2015, with healthy gains of over 7%, while the second main port in Colombia, at Buenaventura, will be the outperformer in terms of container throughput growth (4.75%). That said, these forecasts are down on the estimated growth seen in 2014. Our forecasts are predicated on the fact that Colombian real GDP growth will slow dramatically in 2015, as the impact of weaker oil production and lower oil prices weighs on trade dynamics and undermines consumer confidence.

In the coming year, the deterioration of Colombia's oil sector will weigh on investment inflows and swing the goods trade position into its deepest deficit in more than two...

To read the full article Register for Free or Login

Telecommunications

Colombia Telecommunications

BMI View:

BMI View: Increased competition on the Columbian mobile market is eroding the market shares of traditional mobile network operators such as Claro. Virgin Mobile has been particularly successful in increasing its presence in the Columbian market, growing its market share from zero to almost 4% in just two years. The regulator is keen to open the market up to new MVNOs and has recently launched a consultation to revise the rules for introduction of new MVNOs. It has been reported that Spain's MVNO Pepephone is interested in starting operations in Colombia. Additionally, the Columbian ICT ministry has published rules for another 4G auction, which means that additional bandwidth will be...

To read the full article Register for Free or Login

Latest Colombia Articles

  • A recent attack against Venezuelan soldiers near the Venezuela-Colombia bor...

  • Rising global headwinds will keep Latin American assets under pressure in t...

  • Oil prices will remain anchored until 2018. The return of Iranian oil to ma...

Latest Colombia Blogs

  • Shifting economic growth dynamics and a number of key elections have the po...

  • Over the course of the past two years, BMI's narrative of Latin American ec...

  • Argentine Peso Set For Faster Depreciation Rather Than Devaluation We ex...

Latest Colombia Podcasts