A recent article on the Bloomberg website projected that Colombia is expected to have one of the 20 fastest growing economies in the world this year. Bloomberg surveyed economists in 56 countries to determine the 20 fastest growing economies and Colombia came in at number 12 on their list.
In Latin America, only Peru is expected to experience faster growth than Colombia. Mexico is the only other Latin American country in the list of the 20 fastest growing economies in the world for this year. Since the 2008 financial crisis, Colombia, along with Peru, have been South America’s top economic performers.
Bloomberg’s forecast for Colombia’s economic growth in 2015 about matches what the well-respected International Monetary Fund (IMF) recently forecast GDP growth for Colombia in 2015 – 3.4% GDP growth. The IMF expects that economic growth in Colombia will accelerate somewhat next year, with 3.7% GDP growth expected in 2016.
The following chart shows Bloomberg’s list of the 20 fastest growing economies in the world:
Colombia has been experiencing solid economic growth over the past five years. The IMF estimates that the GDP in Colombia grew 4.0% in 2010, 6.6% in 2011, 4.0% in 2012, 4.7% in 2013, and 4.8% in 2014. Growth is expected to slow a bit in Colombia in 2015 due to the low price of crude oil with an oil-driven export economy in Colombia. The drop in oil revenues prompted the Colombian government to cut its 2015 budget by about 3% in February; cutbacks will mainly affect infrastructure and administrative spending.
What About Cities?
Among Latin American cities, Brookings Institute listed only Medellín, Colombia and Lima, Peru in a recent report about the 50 fastest growing metropolitan cities in the world in terms of economic performance, which looked at GDP growth per capita and employment growth in 2014. Most of the cities in Brookings Institute’s report were in Asia.
Medellín has a booming economy with high-rise apartment construction visible throughout the city. There are at least 17,000 new housing sales in the Medellín metro area each year as we indicated in a recent article.
Medellín also has five of the 15 largest companies in Colombia located in the city as well as 80 higher education institutions, which produced 13% of all graduates in Colombia in the last 10 years.
Medellín, which was ranked the most innovative city in the world in 2013, is executing on an innovation strategy with its Medellinnovation Strategy. The effort includes collaboration between universities, private organizations and the government with about 1,700 organizations participating. The main goal of this effort is to increase the levels of investment in innovation with the purpose of generating a sustainable and a rapidly growing economy in Medellín.
The Bottom Line
Colombia is expected to continue to post solid economic growth over the next several years, which will support a growing middle class in the country. We expect that Medellín is the city in the country that is most likely to experience faster growth than the rest of the country.
Colombia’s steady growth, macroeconomic stability, strategic location, trade agreements, among other variables, make Colombia an excellent choice for your investment.