President Santos approaches the last months of his presidency.The presidential elections will take place on May 25th, and President Santos has announced his run for re-election. A Gallup poll published on March 20 gave him 32.5% of voting intentions, to 15.6% for conservative candidate Oscar Ivan Zuluaga and 11.3% for Green candidate Enrique Peñalosa, with Santos predicted to defeat either in a probable second round; other recent polls suggested that Peñalosa might win a run-off.
The electoral debate has centered so far on the ongoing peace process with the Revolutionary Armed Forces of Colombia (FARC). A positive outcome of the negotiations would boost President Santos's popularity and support.
The peace talks resumed on January 2013 and achieved agreements on two (land/rural issues and political participation) of the six point agenda (Land reform, Political participation, Disarmament, Illicit drugs, Rights of the victims, Peace deal implementation). Negotiations are likely to proceed throughout 2014.
Under an effective countercyclical framework, Colombia’s growth was 4.1 percent in 2013 and is expected to reach 4.5 percent in 2014. Growth in 2013 was above the regional average which was 3.7 percent, although it was affected by lower international commodity prices, and disruptions in coal production. However, economic activity accelerated towards the end of the year, driven by construction, agriculture and extractive activities.
Unemployment reached a record low (9.6 percent in 2013), following important reforms to reduce non-wage labor costs.
The peso has lost 15 percent of its value against the US dollar since early 2013, when the government took steps to weaken the currency to protect the export sector. This was compounded in early 2014 by the sell-off in emerging markets that followed the US Federal Reserve’s announcement that it would wind down its monetary stimulus policies. The devaluation will likely spur exports of commodities and manufacturing goods.
Despite fiscal pressures from the slower economic activity and labor unrests, the government remains committed to fiscal stability. Fiscal results in 2013 remain aligned to Colombia’s medium term consolidation goals. The Central Government fiscal deficit is almost unchanged at 2.3 percent of GDP, below the 2.4 percent expected result of 2013, and in line with the fiscal rule. The overall public debt was reduced from 32.6 percent in 2012 to 32.3 percent of GDP in 2013.