The Economy of Colombia

The economy of Colombia is defined as an open commercialization. At the end of 2005, the total GDP of Colombia based on purchasing power parity (PPP) is approximately $337 billion making it the 29th largest economy in the world. Inflation from 2004 to 2006 has been below 6%. The service sector is the main contributor for Colombia’s economy producing almost 53% of the country’s GDP, followed by the industry sector and agriculture with 35% and 12% respectively. Major industries in Colombia include textiles, petrochemicals, food processing, cement, coal, beverages, aircraft, and electronics. The US, Venezuela, and Ecuador are country’s chief exporting partners while Brazil, China, Mexico, Venezuela and the US are major source of import goods.

Between 1970 and 1998, Colombia has experienced stable economic growth exceeding 4%. But a recession in 1999 made a tremendous impact on the Colombians way of living with unemployment rate reaching 20%. With the help of the International Monetary Fund (IMF), Colombia received a $2.7 billion guarantee to reconstruct its economy and government spending. In the early 2000, signs of economic recoveries have already been evident. By the end of 2000, Colombia once again gained a positive growth of 3.1%.

BusinessWeek Magazine dubbed Colombia as the most Extreme Emerging Market on Earth in May of 2007. Colombia’s current president, Alvaro Uribe, have initiated various economic reforms including policies and strategies to lower the public-sector deficit to 2.5% of the country’s GDP. In 2003, Colombia’s GDP growth was among the highest in the Latin American region.