Economy

Colombia is the fastest growing country in Latin America

The country's GDP grew 3.3% in 2019. Brazil, the region's largest economy, on the other hand, may not have reached 1%

The city of Bogotá. Photo: Shutterstock
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  • In general, both domestic consumption (which grew 4.6%) and gross capital formation (which measures private investment in the country and increased 4.3%) would have pushed the Colombian economy forward last year;
  • The difference between the result obtained and the expected was credited by the authorities to the low attraction of foreign investments.

The Colombian economy is the fastest growing in Latin America. According to the newspaper La Republica, the country’s GDP advanced 3.3% in 2019, slightly below the official expectation of MinHacienda, the country’s Ministry of Finance and Credit Economy, of 3.6%. Brazil, the region’s largest economy, on the other hand, may not have reached 1%, according to a previous indicator released on Friday by the country’s Central Bank.

In the case of Colombia, the group of activities that includes commerce, transportation, accommodation and food was one of the groups that contributed most to the result, with an increase of 4.9% last year, above that of 2018, when the category grew 2.7% over the previous year.

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In general, both domestic consumption (which grew 4.6%) and gross capital formation (which measures private investment in the country and increased 4.3%) would have pushed the Colombian economy forward last year. The difference between the result obtained and the expected was credited by the authorities to the low attraction of foreign investments.

In fact, Colombia does not have the same weight of attraction as Brazil, the largest economy in the region. Brazil, on the other hand, may not have achieved even 1% growth in the last year.

Also on Friday (14), the Economic Activity Index of the Central Bank (IBC-Br) was released, an indicator that is considered the country’s previous GDP. According to the indicator, Brazil grew 0.89% last year, well below the expectations of 1.12% of the Boletim Focus, the weekly survey that the Central Bank does with more than 100 financial institutions.

The official Brazilian GDP number will be released in March by the IBGE. If the preview is confirmed, the country will have had the third consecutive year of economic expansion, but below expectations.

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It is important to remember that the results of the IBC-Br do not always match the official GDP. The BC index incorporates estimates for agriculture, industry and the service sector, in addition to taxes. All of these areas can bring effective results different from those previously estimated.

In general, 2020 will be a year of deceleration, almost stagnation for more developed economies. The United States is expected to grow less than 2%, China is expected to slow down from 6.2% to 5.7% and the world economy as a whole, IMF and other institutions estimate, will grow by around 3%.

It is the emerging ones, from different continents, including the Latin American, that will make the hand move. And Brazil is the main candidate to lead this movement.