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.

    Colombia has received a massive and accelerating inflow of migrants from Venezuela. Approximately 1.4 million Venezuelans have arrived in Colombia as of September 2019, according to Colombian official statistics. Colombia has taken a leading role in adopting an open borders policy and implementing good practices in the provision of services to Venezuelan migrants and returned Colombians in areas such as education to health, services of employment and humanitarian aid.

    Colombia has a track record of prudent macroeconomic and fiscal management, and despite economic downturns has maintained its investment grade rating since 2013. After slowing down to 1.4 percent in 2017, economic growth accelerated to 3 percent in the first half of 2019, driven by robust private consumption and stronger investment. Growth is projected to accelerate to 3.3 percent in 2019, supported by stronger investment growth, accommodative monetary policy, and the dissipation of some transitory factors that affected growth in the first semester.

    It is expected to accelerate further to 3.6 percent in 2020, as private consumption growth remains strong, and investment spending is boosted by lower effective corporate taxes and an expected recovery in residential investment and improved budget execution at the national level. Higher profitability in the oil sector is expected to incentivize investments in exploitation and exploration. A larger number of financial closings for the 4G projects and a pick-up in execution of existing projects augurs well for investment over the 2020-2021 period. Accommodative monetary policy and favorable financial conditions in the domestic market will also support growth.

    Inflation has converged to the targeted range in early 2018 and is expected to remain within the central bank’s targeted range, aided by prudent monetary policy and anchored inflation expectations. Well-anchored price expectations and weaker economic activity, prompted the Central Bank to reverse its monetary policy tightening, cutting the policy rate gradually by a cumulative 350 basis points to 4.25 percent by early April 2018, maintaining a slightly accommodative monetary stance since then.

    Colombia continues to maintain a solid macroeconomic framework. Key components of Colombia’s macroeconomic framework include the adoption of a full-fledged inflation-targeting regime, a flexible exchange rate, a Fiscal Rule (2011) for the central government, and a Medium-Term Fiscal Framework. The solid macroeconomic framework also helps build buffers and strengthen resilience to external shocks, facilitating external and domestic economic adjustment to potential shocks.

    The government has showed commitment to fiscal discipline, complying with the fiscal rule since its introduction. Starting with 2019 the Fiscal Rule Consultative Committee allowed an additional space of 0.5 percent of GDP, declining gradually, to accommodate migration-related spending, with a fiscal deficit allowed under the rule of 2.7 percent of GDP.

    Additional fiscal consolidation measures may be needed to comply with the fiscal rule, as starting with 2020 lower corporate income tax and tax discounts for VAT paid on capital goods will weigh on tax revenues.  Going forward the outlook depends on the country’s ability to address existing structural bottlenecks, sustain fiscal reforms, and diversify its economy to sustain higher productivity growth.

    Last Updated: Oct 10, 2019

  • 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 8th largest Bank borrower with US $10.01 billion in outstanding debt. The active portfolio as of September 2019 includes 15 projects totaling US $2.3 billion in IBRD net commitments. The current portfolio also includes co-financing from the Global Concessional Financing Facility (GCFF), to support Colombia in managing the migration from Venezuela, and from the Clean Technology Fund (CTF).

    Last Updated: Oct 10, 2019

  • Projects approved in FY19 were: (i) Clean Energy Development Guarantee ($41m IBRD; $40m CTF), (ii) Support to Bogota’s First Metro Line – first project in the series ($70m), (iii) the Multi-Purpose Cadaster IPF ($100m), and (ii) Fiscal Consolidation, Competitiveness and Migration Policy DPF ($718.5m IBRD; $31.5m GCFF).

    Projects approved so far in FY19 include the Orinoquia Integrated Sustainable Landscapes Project ($5.9m GEF). The remaining FY20 pipeline includes: (i) DPF for Territorial Development ($400m) and (ii) Support to the Financial Sustainability of the Colombian Health System P4R ($150m IBRD; $35m GCFF).

    The Bank’s current financial engagement focuses on: agriculture/livestock, competitiveness, disaster risk management, environment, fiscal sustainability, governance, higher education, energy, migration, rural land cadaster, transport and water and sanitation.

    The Bank supports Colombia’s 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.

    Last Updated: Oct 10, 2019

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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