Highlights
Economic overview
Colombia is struggling to tame high inflation and low economic growth, both of which are concerns for upstream investment.
Colombia’s inflation rate was 8.97% in July, its highest level since October 2000. This resulted in the country’s central bank hiking its benchmark interest rate by 25 basis points in July, to 7.75% – the eleventh consecutive month of rate rises. However, the tightening monetary policy has taken its toll on Colombia’s economic growth. The country’s GDP expanded by 2.5% on an annual basis in Q1 2016, which was lower than the 3.1% growth seen in 2015 and the 4.4% it achieved in 2014.
Quarterly and annual year-on-year GDP growth rates
| Q4 2015 | Q1 2016 | Q2 2016 | 2016 | 2017 | 2018 | |
| US | 1.9% | 1.6% | 1.2% | *2.4% | *2.5% | *2.4% |
| Canada | 0.3% | 1.1% | * 1.5% | *1.5% | * 1.9% | *2.1% |
| Mexico | 2.4% | 2.6% | 1.4% | *2.4% | *2.6% | *2.8% |
| Brazil | -5.9% | -5.4% | *-3.8% | *-3.8% | *0.0% | *1.1% |
| Argentina | 2.2% | 0.5% | *-1.0% | *-1.0% | * 2.8% | * 2.9% |
Persistently low oil prices have dented Colombia’s export revenues, which in turn are also weighing on upstream investment. GGA expects Colombia’s marketed gas production to decline by 2% on an annual basis in 2016, to 11.1 billion cubic metres. Meanwhile, the country’s gas demand is still rising, and Colombia expects to install its first FSRU by the end of 2016.
Several countries in Latin America and the Caribbean refrained from altering their interest rates in July after the United States Federal Reserve delayed its rate hike. Countries such as Brazil, Mexico and Peru are all waiting for a move by the Fed, which may prompt them to follow suit.
You must be a subscriber to read this content
Already a subscriber?
If you already have a subscription, sign in to continue reading this article.
Sign inNot a subscriber?
To access our premium content, you or your organisation must have a paid subscription. Sign up for free trial access to demo this service. Alternatively, please call +44 (0)20 3004 6203 and one of our representatives would be happy to walk you through the service.
Sign up