Economy

Colombia has returned to its historic growth path close to 4%. Economic growth is being driven by the private sector: private investment, with a 12% GDP share was the demand component that most contributed to the economic growth in 2004. Exports, with a 19% GDP share showed the highest annual increment of the past 10 years. Economic growth was also characterized for being multisectorial; a characteristic given by the positive variations that without exception affected all the sectors in 2004.

During the first quarter of 2005, several indicators show that the Colombian economy continues its growth dynamics. Unemployment rate during the first three months of the year was 1.9 percentage points below the rate recorded in the same period of 2004. Household consumption continues to recover. This is reflected in retail sales which in February of this year grew 3.2 percentage points over those in February of 2004. Meanwhile, inflation as of March kept reducing and reached the lowest figure of the past two years. In addition, it’s important to note the greater confidence of the corporate environment towards the economic prospects of the country. This can be credited to the improvement of the security conditions, and the democratic security and defense policy of the Government.

Prospects for 2005, suggest that the economy will continue through its growth path, with an economic growth similar to the one of 2004. This will be led by consumption, exports, and private investment which will continue to be stimulated by the large liquidity and low interest rates of the Colombian market.