Overview

  • President Iván Duque Márquez, began his presidential term on August 7th, 2018, and it will end on August 7, 2022. Duque, from the Democratic Center party, won the elections by achieving 53.95% of the votes (10,351,304 votes) while his rival Gustavo Petro reached 41.83% (8,024,697 votes). The main pillars of its government are legality, entrepreneurship, and equity, with transversal axes in terms of: infrastructure, environmental sustainability and innovation.

    Duque has insisted on austerity and responsibility in the management of public resources during his term. The new president will also present a tax reform to the congress that seeks to take effect on January of 2019.

    Economic growth in the country slowed to 1.8 percent in 2017. Private consumption adjusted to the one-off impact of the 3-percentage point (pp) VAT increase. Government consumption remained subdued due to continued fiscal consolidation efforts.

    On the supply side, industrial production declined in 2017, primarily due to weak performance in the extractive industries, as gold, platinum and silver output plunged. Oil and gas production declined nearly 4 percent and refining output also fell. The manufacturing of textiles and beverages declined.

    Financial and social services contributed the most to growth, while the agriculture sector expanded 4.9 percent as the effects of the El Niño phenomenon dissipated and the livestock sector expanded more rapidly.

    Growth is expected to strengthen gradually over the 2018-2020 period, with growth accelerating to 2.7 percent in 2018, and further to 3.6 percent by 2020, supported by higher oil prices, stronger private sector demand, and a pick-up in implementation of the 4G infrastructure program. The 2016 structural tax reform is yet to reach its full domestic resource mobilization potential, as lower economic activity and delays in reforming the tax administration have weighed on revenues.

    Further fiscal consolidation efforts are thus critical for creating fiscal space for the post-conflict related spending and keeping a minimum level of public investment, while complying with the fiscal rule. The rule requires that the Central Government deficit declines by 2.6 percent of GDP by 2022 to 1 percent of GDP, with the structural deficit declining by 0.9 percent of GDP to 1 percent. The continued compliance with the fiscal rule, instituted for the first time in 2012, shows that fiscal management remains strong.

    Colombia's flexible exchange rate regime is one of the first lines of defense against external shocks. Consistent with the inflation-targeting regime, the flexible exchange rate acted as the main shock absorber, depreciating more than 70 percent between mid-July and early 2016, before appreciating slightly in 2017.

    The current account deficit adjusted more than expected to 3.3 percent of GDP, as the terms of trade improved by more than 15 percent while external demand strengthened. The current account deficit is expected to remain below 3.5 percent of GDP, supported by higher oil prices, a gradual recovery in non-oil exports, and despite a marginal decline in oil production.

    Inflation is expected to remain within the targeted range of 3 ±1pp, aided by prudent monetary policy, well anchored inflation expectations, and excess capacity.

    Last updated: April 16, 2018

     

  • The Country Partnership Framework (Fiscal Year 2016-21) aims to support the government's development goals and guarantee the quality of the World Bank Group's (WBG) financial, knowledge and convening services to respond to the specific development needs of Colombia. The program supports the government under three strategic pillars:

    •Fostering Balanced Territorial Development;

    •Enhancing Social Inclusion and Mobility through Improved Service Delivery; and

    •Supporting Fiscal Sustainability and Productivity.

    Colombia is IBRD’s 7th largest Bank borrower with US$9.6 billion in outstanding debt. The active portfolio includes 11 IBRD credit operations and 2 Global Environment Facility (GEF) projects and one project for low carbon sustainability in the Orinoquia with net commitments of close to US $ 2.1 billion.

    Colombia also has a considerable Trust Fund portfolio with US$71 million represented in a variety of sectors.

    Last updated: April 16, 2018

     

  • In FY17, two Development Policy Financing operations and two investment credits were approved, for an amount close to US$1.7 billion.

    The Bank supports Colombian efforts to improve public sector management in municipalities to reduce poverty and inequity. It also supports urban public transport; the post-conflict and peacebuilding process (mostly through a multi-donor trust fund), as well as long-term natural disaster risk management and a disaster risk financing strategy, through the Treasury Bank

    The Bank is helping to strengthen the national protected areas in Colombia, through the coordination between government agencies and the local population.

    As of December 31, 2017, 2.998 farms from 12 departments/87 municipalities in Colombia have benefited to date from the sustainable cattle ranching project. The farmers have received technical assistance in environment friendly cattle systems. There are 77.238 hectares under environment friendly cattle systems as of now.

    Over the past 15 years, more than half a million higher education students in Colombia, especially those from vulnerable socio-economic backgrounds, have benefited from World Bank investment projects and have been able to access quality education through partnership with World Bank. The Higher Education Quality Access Program (ACCES - Acceso con Calidad a la Educación Superior) and the recently approved Access and Quality Program for Higher Education (PACES - Programa de Acceso y Calidad de la Educación Superior), which will benefit some 287,000 students, focused on supporting students from unfavorable socio-economic contexts as well as indigenous, Afro-Colombians, students from remote areas, and victims of armed conflict.

    Last updated: April 16, 2018

    To read about more World Bank results in Colombia, click here.

     

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LENDING

Colombia: Commitments by Fiscal Year (in millions of dollars)*

*Amounts include IBRD and IDA commitments


PHOTO GALLERY

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Additional Resources

Country Office Contacts

COLOMBIA: (57) 1 - 3263600
Cr 7 # 71 - 21, Torre A, piso 16
jbedoyavilla@worldbank.org
USA +1 202 473-1000
1818 H Street NW, Washington, DC 20433, USA
jbedoyavilla@worldbank.org