Colombia tipped for growth

Colombia has been tipped for growth since 2009 when the acronym CIVETS was coined by the Global Forecasting Director, Robert Ward for the Economist Intelligence Unit. The acronym stands for Colombia, Indonesia, Vietnam, Egypt, Turkey and South Africa. These countries were singled out for attention because they have a young population, have managed to control inflation and have a relatively sophisticated banking system already in place.

This is certainly true of Columbia, and out of all these countries it has the best infrastructure already in place which will enable rapid economic growth. It has also managed to achieve consistent GDP growth for over 70 years and has never experienced hyperinflation, and in fact inflation has been kept within single digit figures since 1999. The GDP growth from 2002 to 2007 averaged out at 5% a year which was mainly due to increased foreign investment, export growth and reforms in the energy sectors. The country has large mineral and energy reserves, especially coal and natural gas.

Columbia has managed to triple its exports during the last six years which was largely due to the Andean Trade Promotion and Drug Eradication Act. During this time period exports grew from $13 million in 2003 to $32 million in 2009. It has successfully increased tourism numbers even at the height of the global recession. Tourism numbers throughout the world fell by 4% in 2009 while in Colombia it increased to 10.2% in the same year. The Columbian government actively encourages overseas investors as it is looking to increase business opportunities within international markets.

Large companies already eyeing up Columbia

Large international companies are already starting to realise the potential in Colombia and investment firms are looking at property companies which will provide the best returns.

The feeling is that the property market there is about to take off and it's best to get in early to get the best profits. It's not just large property companies who are investing here as the world's richest man Carlos Slim already has major holdings in Colombia which are largely in oil and gas reserves, and has indicated he intends to increase these further.

There is an increasing demand for affordable and middle income housing within Colombia and with the rise of the middle class this demand will remain constant for quite some time to come. Colombia also has plans to integrate its securities exchange with Peru and Chile which will attract overseas investors and create more liquidity.

Colombia has a population of 45 million, and in common with so many other rising economies it is youthful. The country has managed to shake off much of its violent reputation through the institution of new security policies. These policies were put into place in 2002 and have reduced the number of murders by half and the number of kidnappings by 93%. Since then the country has gained confidence and has greatly strengthened its economy.

The economy is predicted to increase by 4.5% this year, and foreign investment in the country has quadrupled over the last decade. The current president plans to double government housing subsidies to the poor and middle class to boost the economy even further.