11 Interesting Colombian Economy Facts That You Should Know

Colombia is a transcontinental country situated in the northwest of South America and shares a border to the northwest with Panama.

Colombia is classified as an upper-middle-income economy and is one of the largest economies according to IMF. Colombia is located in the northwest corner of South America, and most of its population is Spanish-speaking.

Both Brazil and Colombia share a common land border. It is considered the third most populous country in Latin America. It has plenty of nonrenewable and renewable resources with gold reserves, coal, and petroleum, making the central part contributing to its GDP and overall development. Gold, coal, coffee are Colombia's main exports.

Vital economic components include textiles, food processing, petroleum, clothing, footwear, chemicals, cement, automobiles, and services such as telecommunication and tourism. Colombia has a good relationship with the world bank started in 1946 when the country signed the IBRD Articles of Agreement.

Poverty in Colombia is showing a decreasing trend. The share of Colombians below the income-based poverty line decreased from 50% in 2002 to 28% in 2016 due to various measures taken by the government.

Colombia oil pipelines were constructed for commercial usage in 1992. This oil mining contributes to the highest rankings. Argentina has an embassy in Bogota city of Colombia, and the Colombia government has an embassy in Buenos Aires. Both the countries are full members of the Organization of American States.

If you enjoy this article on Colombian economy facts, you may also be interested in reading our other articles such as Austria facts and Finland facts. Let's dive deeper into Colombian facts.

Colombia Economic Issues

 Colombia was once inhabited by indigenous people who were hunters or nomadic farmers during the pre-Columbian period.

The covid-19 pandemic has hit Colombia hard, but prompt and decisive actions taken by the government have protected most of the lives, jobs, and firms. This helped to reduce unemployment.

Colombian government confronted the crisis with unresolved challenges such as productivity growth rate has been a drag on economic growth over past twenty years. This country is highest in income inequality and labor market informality.

Despite the fiscal policy, the government debt to GDP ratio has been upward since 2012. Inflation is estimated to pick up in 2021 due to an increase in production costs abroad and by the depreciation of the peso's value.

The world bank has executed various measures like financing a variety of projects that will support the people of Colombia and give them access to education. The present account deficit is estimated to decline over the mid-term as exports and imports of goods and services and dividends distribution to foreign investors go back to pre-pandemic levels.

What is Colombia's economy based on?

Shipbuilding, electronics, automobile, tourism, construction, and mining showed a rapid boom during the 2000s and 2010s. Colombia is the 2nd largest producer in Latin America, followed by Mexico when it comes to electronic appliances. However, most Colombia's exports are still commodity-based, like coffee, gold, and cut flowers.

When it comes to exports, in Colombia, petroleum occupies around 45%, whereas manufacturing represents nearly 12%, and it is growing at a rate of 10% a year. Poverty levels were high in the past decade, but it has seen a decline by 30% at the end of 2018.

On average, its poverty has been decreasing by 1.35% per year since 1990. Colombia has information technology and tourism as the fastest growing sector, and it has the most extended fiber-optic network.

The Bank of Republic is the central bank of Colombia. The central bank is very active in promoting financial inclusion policies.

The services sector dominates its GDP, which contributed around 58% of GDP in 2007. The service sector has provided the most significant employment in formal and informal sectors and is primarily characterized by its heterogeneity.

Colombia Economy Ranking

The Colombian economy is a free market economy with significant investment and commercial ties in the United States and other foreign companies. When measured in gross domestic product, Colombia's economy occupies the fourth largest position in Latin America.

In the last decade, historic economic growth was observed in the Colombian economy. Colombia holds 4.36 trillion cubic feet of proven natural gas reserves, and as of 2017, it ranked 46th in the world.

In recent years, economic policies and aggressive promotion of free trade agreements have consistently increased its ability to face external situations. GDP growth of 4% per annum was recorded in recent years and continued for almost a decade which is expected to be the same for strong economic performance.

Foreign investment or trading is mainly concerned with exporting raw materials and the importation of machinery and manufactured goods.

Many investors have come forward to direct their investment in developing countries like Colombia, and many remarkable projects were executed with cooperation between the world bank and the Colombian government. These projects are related to education which is the significant agenda of the world bank.

When it comes to trading, Colombia is considered the single largest trading partner in the United States. Manuelita is a Colombian agribusiness corporation, and it could be regarded as a traditional company in Colombia whose major products are refined sugar, plan oil, biodiesel, and fruits.

This company was founded in 1864 as the major share of Colombia's economy is agriculture. Although industries developed since 1940 have been remarkable, this could be considered one of the country's oldest firms.

Is Colombia a third-world country?

Colombia is a great country, and it has a lot to offer as it is very popular for its innovation, attractions, emerald, gold coffee, and rich volcanic soils compared to other countries. Colombia has the ability to be known by famous people and influencers on various platforms like athletes, musicians, and literary figures.

Colombia can be called a third-world country in modern terms, but the economic crisis is much less when compared to first and second-world countries. The country faces a high level of corruption, extreme poverty and is unsafe in many places.

People in Colombia have less access to infrastructure and facilities.

When it comes to education and health facilities, we could call Colombia a poorly maintained country as the life expectancy of people is very low. A substantial proportion of Colombian land is uncultivated because of poor soils and unfavorable climatic conditions.

The term third world is calculated based on indexes of development. Capita income, health care, the standard of living, education sectors Colombia is poorly ranked. Despite all the challenges, Colombia is emerging as an upcoming market and trying to better its people.

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