Colombian Main Economic Sectors

Transcription

1 Colombian Main Economic Sectors Patricia Krause March2014

2 Colombian Main Economic Sectors Colombian Main Economic Sectors March

3 Industry -Outlook industrial sector was the one which showed the least performance Growth was driven by construction followed by consumption and exports disappoint Manufacturing has been the hardest hit activity -First 3Q2013 contracted by 1.2% YoY Affected by lack of competitiveness, smuggling, informality and the impact of national strikes 2014 expected to be somewhat more balanced and to get higher pace in the 2H2014 Stronger economy in the US and the stable growth rates in China should contribute to the positive performance of exports Foreign trade agreements are also contribute to explore new markets Investments in infrastructure will help to reduce the Colombian production cost Colombian Main Economic Sectors March

4 RETAIL Fourth largest market in Latin America Together with Peru is considered the market in Latam where private consumption has the largest potential growth in coming years 18th most attractive country for retail investment, Has risen in the past years, boosted by lower unemployment, growing credit, rising disposable income and increasing urbanisation. Jan-December 2013: + 4% YoY Consumer Confidence reached points in January (averaged from 2003 until 2014) Growth should accelerate: positive prospects for the economy, friendly business environment for foreign investment, and the increasing access to the banking system by the general population Internet retailing will continue to grow at double-digit rates Computers, home appliances and furniture will keep growing above retails average Source: IMF, BMI and DANE Colombian Main Economic Sectors March

5 Construction Has been one of the most dynamic sectors: average growth between of 7.4% Growth accumulated in the 3Q2013: Construction:10.8%, -housing:13.6% and civil works 8.3% Expansion in the construction sector will continue to lead growth, but at a more moderate pace than in 2013 Slowdown in the second half of 2014 is expected, after elections Housing the government plan of 100 thousand new homes has also favored the performance of the sector interest rates for housing loans for properties between 80 million and 200 million COP, was reduced from an average of 12% -12.5% to 7% Source: DANE, ANID and BMI Colombian Main Economic Sectors March

6 Construction Government also launch program focused on the range of the population that earns between 1 and 2 minimum monthly wage - public investment of 8 billion pesos was made Social housing and commercial buildings are expected to grow in higher pace than housebuildings Medium-sized cities have been receiving strong investments Buiding sector will remain as one the lears of GDP growth streght by household income and public suport to the setor In the upcoming years growth will be mainly driven by social housing, where demand and the housing deficit is greatest challenges in the coming years: restrictions on expansion in cities (Bogota, Medellin) will change the model of housing supply Local governments will have to commit themselves to better and more extensive public infrastructure to avoid a collapse Source: DANE, ANID and BMI Colombian Main Economic Sectors March

7 Construction Infrastructure Priority to support booming extractive industry and to boost the FTAs In 2011 the National Infrastructure Agency was created to overcome obstacules faced in public projects Public-private partnerships (PPP) were endorsed 304km of dual carriageway were built through concessions from 2010 to 2012 Ambitious program Fourth Generation of Concessions 4G- an additional 1.6 points contribution to GDP Includes a length of 8,918 km with an estimated investment of 47.2 billion COP Threat: some projects have already been postponed, internal security situation and deep-rooted corruption within the public works sector remains November New Infrastructure Law aim to ease works development Source: DANE, ANID and BMI Colombian Main Economic Sectors March

8 Agriculture Growth in 2013 estimated in 5.4% Good performance driven by coffee +41% Coffeee: seeing the results of improved weather and the first harvest of disease-resistant trees Exports will receive a lift from the free trade agreement (FTA) signed with the EU Other Crops: growth in 2013 estimated in 2.6% Not a good year in terms of profitability: lower international prices, higher imports and appreciated peso Colombia-EU free trade agreement: producers fear the effect over its profitabilty Sugar: Colombia is one of the world's most efficient sugar producers, with output of 120 tonnes per hectare (ha) Contracted by 2.6% in due to heavy rains from La Niña; production expected to recover in crop (+6.8%) Local oversupply and high infrastructure cost- depends on government subsidies Source:Sociedade de Agricultores de Colombia Colombian Main Economic Sectors March

9 Agriculture Forecast 2014: Sector is expected to grow 3-3.5%, lower than the rest of the economy Deterioration in profitability and low internacional prices should remain The expected recovery of the US economy, main destination of exports, may positively influence the performance of the sector The number of producers who said they are lowering their levels production increased A decrease both in investments and in intention to invest in the short term Deficit of public goods transportation infrastructure, education, research and technology transfer inhibits sustained growth. Good national macroeconomic scenario should remain contributing to an environment of demand Source:Sociedade de Agricultores de Colombia Colombian Main Economic Sectors March