Economics in Colombia, Economic Analysis
In 2016, the Colombian economy suffered one of the lowest growth since 2009, according to (Dane, 2017) “2% growth represents the lower growth of the country’s economy in 7 years, after having grown up in1.7% in 2009 ".
The low growth of the economy in this year is due to the fall of the mining and transport sectors, which throughout the year suffered problems due to hydrocarbons.
The sectors that grew the most during 2016 were those of financial services with 5 %, followed by the construction sector with 4.1 % that according to the director of the Dane Mauricio Perfetti;(Perfetti, 2017) “The behavior of financial and real estate services is explained by the growth of the three subsectors that make up the activity, where financial intermediation services stand out with 11.1% and real estate and housing serviceswith 3.2%".
In 2017, GDP presented only an increase of 1.3%, which presented a decrease in 0.73% compared to 2016.
The sectors that promoted the Colombian economy and that remained positive during all the quarter of the year were: agriculture, livestock, hunting, forestry and fishing with 4.9%. Financial and insurance establishments with 3.8%. And communal and personal services with 3.4%. The growth of the primary sector in 2017 is due to the results of the peace process.
The Colombian economy presented an increase of 2.7% during the IV quarter of 2018, which presented an increase of 1.3% compared to 2017 exceeding market expectations. The sectors that contributed the most to Colombian GDP in 2018 were: professional, scientific and technical activities with 5% and public administration, education and health with 4.1%.
Thanks to the recovery of the economy, various sectors such as the manufacturing industry with 2%, and the construction sector with 0.3%were recovered.
In 2016, the country presented one of the highest inflation rates in the last 16 years, it should be remembered that the inflation target established by the Bank of the Republic Ronda between 2% and 4%. In this year the completion of the truck strike was presented, which increased the prices of the products of the basic family basket reaching an inflation rate in the first half of 2016, of 8.97%. After the culmination of truck driver, the food price had an inflation percentage of 7.22%;Not only food, also health expenses such as medicines and private assurance fired their price at at least 8.14%. These were the two most important factors that increased in the cost of living of Colombians.
Inflation in 2017:
In 2017, inflation was located in a 4.09% with which it decreased by 1.66% with respect to the previous year, inflation exceeded the expectations of the side of the Republic and a decrease in the price of 1.92% food was presented;that were in a 7.22%.
According to (Dane, 2017): “The food sector presented the lowest annual variation in prices with 1.92%, followed by costumes with 1.98% and housing with 4.49% on the other hand the sectors that presentedgreater variation were 7.69 %fun items;Education 7.41 %;communications 6.43 %;health 6.34 %;Transport 4.52 % and housing 4.49 % ".
Inflation in 2018:
Colombia closed 2018 with an inflation of 3.18%, with which there was a decrease of 0.91% compared to the previous year, there was not only a decrease in interest, the goal established by the Bank of the Republic is also met. According to the results of the DANE, the greatest contributions to the annual variation was recorded by the housing and food groups that contributed to 1.98% to the annual accumulated of said variation.
In 2016 there was a trade deficit of 11.081 million dollars, there was a decrease in -2.8% With respect to last year, the causes of commercial deficits are derived by various factors, one of them is the devaluation of the peso, another is the country’s economic instability, the preferences of consumers and producers.
In 2017 there was a commercial deficit of 5.950 million dollars which represents a variation of 2.6% compared to the previous year, there was an increase in exports of the country, which was reducing the commercial deficit a bit.
In 2018 the country’s trade deficit was 7.040 million dollars with which there was an increase of 16.8% compared to the previous year, although exports are the largest in the last 3 years, so are imports, also for the same causes already set out in 2016.
Fiscal Deficit 2016-2018:
During 2016, the collection goal presented in June of that year was not fulfilled, which was $ 120.3 billion. Instead, the net collection of the year was $ 116.9 billion, that is, a difference of $ 3.3 billion.
Now, much of that $ 3.3 billion were covered with both external and internal debt, while $ 20.000 million were covered through capital resources.
The government deficit reached a 3.6 % of GDP in 2017, which is equivalent to about 11,000 million dollars. It was a slight improvement, compared to 2016, when that indicator reached 3.8 percent of GDP. However, the state’s goal was that the deficit, for 2017, remained in 3.3 %. From the previous year and the effect of the last tax reform, which increased the VAT rate from 16 % to 19 %, the growth of the internal demand of the economy resulted, resulting in low international recognition.
Colombia fulfilled its 2018 deficit objective, of 3.1 %, thanks to the original income from the Financing Law, although the objective of the Financing Law, which was initially for $ 14 billion and was $ 7, was $ 7,1 billion. In 2018 there were many more expenses and less income for the Colombian government, such as the fall in oil prices and Venezuelan migration, which cut off income and increased the expenses that according to (Fitch Ratings, 2018) “Colombia has a debtGovernment Bruta, around 41 % of GDP ".
2016-2018 unemployment rate
During 2016 the unemployment rate was 9.2%, it was positioned as the highest rate since 2013, which has an explanation because on average, during all months of that year there were 139.000 jobs rather than in the previous year, but it was not enough for 232.000 people who went for work every month.
It should be noted that, in 2016, for each position created by the private sector for workers or employees, almost two jobs were created on their own.
In the same way, of the 10 branches of activity, in 5 they were lost throughout the year: 56.000 in industry, 31.000 in communal services, 27.000 in transport and communications, 23.000 in minerals and 4.000 in electricity, gas and water.
The unemployment figure in Colombia during 2017, registered an increase of 0.2 %, thus placing 9.4 %. In December 2017, 22,649 were registered in the country.000 occupied in the country, the highest level since comparable figures are handled.
Agriculture, transport and construction were the branches that contributed the most to the generation of employment in the last quarter of 2017, it is noted that the manufacturing industry had a positive variation in the employed population, which completes 16 consecutive periods with positive data fromEmployment generation by manufacturing activity.
The unemployment figure in Colombia during 2018 was 9.7 %, which presented an increase of 0.3 % compared to the previous year. The growth was seen because 333 were presented.000 people unemployed in December. The unemployed population is explained by the increase in migrants in the main cities of the country.
As for the results by cities, according to the DANE: ”Quibdó and Cúcuta were the territories with the highest rate when reporting 17.8% and 16.3%, respectively. This was followed by Armenia, with an unemployment rate of 15.6%".
Conclusions of the Colombian economic analysis in 2016-2018:
The Colombian economy has been undergoing growth in these 3 years, which is evidenceThat due to climate change and the little preparation the country to face them has a stronger impact on the economy, several strikes that generate inflation in prices and two tax reforms, among other factors.
They make the Colombian economy stag.
Leave feedback