Colombian Economic Prospects Juan José Echavarría Co-Director, Central Bank of Colombia October, 2008
Topics Growth Inflation Exports, Foreign Direct Investment and Remittances The Financial Sector Central Bank Policy
Topics Growth Inflation Exports, Foreign Direct Investment and Remittances The Financial Sector Central Bank Policy
Banrep31 Colombian long run growth (GDP, annual growth %) average 1960-2007: 4.3% average: 3 years 4 Source: DANE, Central Bank
Folie 4 Banrep31 Responsable: Última Fecha de Actualización: Banco de la República; 30.07.2008
Banrep1 GDP Quarterly Growth (%) 5 Source: DANE, Central Bank
Folie 5 Banrep1 Responsable: Última Fecha de Actualización: Banco de la República; 30.07.2008
Banrep4 Investment (annual growth %) Source: DANE, Central Bank
Folie 6 Banrep4 Responsable: Última Fecha de Actualización: Banco de la República; 30.07.2008
Banrep5 Investment/GDP (%) Average 1977-2007 = 15.6% Source: DANE, Central Bank
Folie 7 Banrep5 Responsable: Última Fecha de Actualización: Banco de la República; 30.07.2008
Homicide rates: Bogota, Colombia Homicide rate in the city of Bogota (Colombia) 100 80 Hot spot policing Better local institutions A program aimed at 60 restoring civil culture 40 The strong success surpassed dthe modest 20 goals set by the 0 authorities. 1993 1996 1999 2002 2005 Year
Homicide rates: Medellin, Colombia Homicide rate in the city of Medellin (Colombia) Increased police presence in 400 problematic neighborhoods 300 200 100 0 1991 1994 1997 2000 2003 2006 Year Better policing practices An ambitious plan of public works The intervention was localized geographically and thematically
Banrep6 Consumption (annual growth %) Source: DANE, Central Bank
Folie 10 Banrep6 Responsable: Última Fecha de Actualización: Banco de la República; 30.07.2008
Banrep10 GDP Growth (%) in Latin America: 2008 and 2009 j6 Source: Latin American Focus Consensus Forecast, October 2008 11
Folie 11 j6 Banrep10 arreglar jechavso; 09.06.2008 Responsable: Última Fecha de Actualización: Banco de la República; 31.07.2008
Growth Inflation Topics Exports, Foreign Direct Investment and Remittances The Financiali Sector Central Bank Policy
Annual Inflation Rate (%) 4.5 3.5 Fuente: DANE, cálculos del Banco de la República. Source: DANE, Central Bank
Banrep12 Core Inflation (%) 14 Source: DANE, Central Bank
Folie 14 Banrep12 Responsable: Última Fecha de Actualización: Banco de la República; 31.07.2008
Inflation expectations derived from colombian treasuries j16 Source: Central Bank
Folie 15 j16 arreglar jechavso; 03.12.2007
Banrep14 Inflation (%) 16 Source: Latin American Focus Consensus Forecast, October 2008
Folie 16 Banrep14 Responsable: Última Fecha de Actualización: Banco de la República; 30.07.2008
Topics Growth Inflation Exports, Foreign Direct Investment and Remittances The Financial Sector Central Bank Policy
CP1 Exports 18 Source: DANE, Central Bank
Folie 18 CP1 Responsable: dayra Garrido Última Fecha de Actualización: 08/08/2008 SERGIO OLARTE; 08.08.2008
CP2 Exports to USA and Ecuador Fuente: DANE 19 Source: DANE, Central Bank
Folie 19 CP2 Responsable: dayra GArrido Última Fecha de Actualización: 08/08/2008 SERGIO OLARTE; 08.08.2008
CP3 Exports to Venezuela 20 Source: DANE, Central Bank
Folie 20 CP3 Responsable: dayra garrido Última Fecha de Actualización: 08/08/2008 SERGIO OLARTE; 08.08.2008
Banrep16 21 Source: Central Bank
Folie 21 Banrep16 Responsable: Última Fecha de Actualización: Banco de la República; 31.07.2008
j14 Proyections, GDP growth (%), Venezuela j9 Latin American Consensus Forecast, octubre 08 22
Folie 22 j9 j14 arreglar jechavso; 09.07.2008 actualizar jechavso; 27.10.2008
Banrep21 Capital Account (US$ millions) Source: Central Bank
Folie 23 Banrep21 Responsable: Última Fecha de Actualización: Banco de la República; 31.07.2008
Banrep22 FDI to Colombia (US $ millions) 24 Source: Central Bank
Folie 24 Banrep22 Responsable: Última Fecha de Actualización: Banco de la República; 30.07.2008
FDI in Colombia, 2000-2008 Other 64% 2000 2005 Oil 11% Minning 25% Other 47% 2006 2008 Minning 18% Oil 35% Other: 2006 2008 47% Transport & Comun. 19% Financial 24% Commerce 20% Manufactu ring 32% Others 5%
Banrep24 Source: Central Bank
Folie 26 Banrep24 Responsable: Última Fecha de Actualización: Banco de la República; 31.07.2008
Banrep36 Remmitances (US$ millions, 1 st sem) México 2008: US$ 11,601 Source: DANE, Central Bank
Folie 27 Banrep36 Responsable: Última Fecha de Actualización: Banco de la República; 30.07.2008
Banrep25 Current account deficit j10 28 Source: Latin American Focus Consensus Forecast, October 2008
Folie 28 j10 Banrep25 arreglar jechavso; 09.07.2008 Responsable: Última Fecha de Actualización: Banco de la República; 31.07.2008
Topics Growth Inflation Exports, Foreign Direct Investment and Remittances The Financial Sector Central Bank Policy
Banks profits 4 Profits/Assets (%) -4-2 0 2 01 Jan 90 01 Jan 95 01 Jan 00 01 Jan 05 01 Jan 10 Source: Central Bank
Provisions/Risky Credit 60 70 Commercial 60 70 Total 50 50 Consumption 40 40 Housing 20 20 30 30 01 Jan 02 01 Jan 04 01 Jan 06 01 Jan 08 01 Jan 02 01 Jan 04 01 Jan 06 01 Jan 08 Source: Central Bank
Banks Assets 80 loans/assets (%) 40 60 bonds/assets (%) 0 20 01 Jan 90 01 Jan 95 01 Jan 00 01 Jan 05 01 Jan 10 Source: Central Bank
19.7 17.9 16.2 16.0 Source: Central Bank
The Stock Exchange 120 Latin America 120 100 Colombia 100 United States Colombia 80 80 Asia Europe 60 60 20 40 Until October 27,2008 Eastern Europe 01 Jan 08 01 Apr 08 01 Jul 08 01 Oct 08 date 20 40 Japan 01 Jan 08 01 Apr 08 01 Jul 08 01 Oct 08 Source: Bloomberg
Topics Growth Inflation Exports, Foreign Direct Investment and Remittances The Financial Sector Central Bank Policy
Interest rates Exchange rates Central Bank Policy International reserves Other measures
Interest rates Exchange rates Central Bank Policy International reserves Other measures
Countries following inflation targeting 1 Australia 15 Slovak Republic 2 Canada 16 South Africa 3 Czech Republic 17 Spain 4 Finland 18 Sweden 5 Hungary 19 Switzerland 6 Iceland 20 Thailand 7 Indonesia 21 Turkey 8 Israel 22 United Kingdom 9 Korea 10 New Zealand 23 Brazil 11 Norway 24 Chile 12 Philippines 25 Colombia 13 Poland 26 Mexico 14 Romania 27 Peru 38
j11 Source: Central Bank
Folie 39 j11 falta jechavso; 03.12.2007
Banrep26 40 Source: Latin American Focus Consensus Forecast, October 2008
Folie 40 Banrep26 Responsable: Última Fecha de Actualización: Banco de la República; 31.07.2008
j12 4.84 4.53 Source: Central Bank,; non food prices used as deflator
Folie 41 j12 no deja ver la data jechavso; 04.12.2007
Interest rates Exchange rates Central Bank Policy International reserves Other measures
Banrep18 Nominal Devaluation in Latin America, last 3 years 3 years 2 years Perú -9,94% Uruguay -6,44% Brasil -5,51% Perú -5,93% Uruguay -4,84% Colombia -3,85% Colombia -1,51% Brasil -0,86% Argentina 8,42% Argentina 4,17% Chile 14,40% 40% Chile 16,08% México 17,84% México 18,03% 1 year 1 month Perú 1,02% Perú 2,57% Uruguay 1,36% Argentina 3,22% Argentina 1,82% Uruguay 5,31% Colombia 12,63% Colombia 9,47% Brasil 16,50% Brasil 11,71% México 18,30% Chile 11,92% Chile 22,08% México 19,08% Source: Central Bank 43
Folie 43 Banrep18 Responsable: Última Fecha de Actualización: Banco de la República; 31.07.2008
Banrep19 44 Source: Central Bank
Folie 44 Banrep19 Responsable: Última Fecha de Actualización: Banco de la República; 31.07.2008
j15 Real exchange rate (non traditional exports) 45 Source: Central Bank
Folie 45 j15 arreglar jechavso; 28.10.2008
Interest rates Central Bank Policy Exchange rates International reserves and foreign debt Other measures
International Reserves 7 8 9 10 11 Rint/Foreign Debt Amortizaton (%) Rint/Current Account Deficit 0.5 1.0 1.5 2.0 2.5 Rint/GDP (%) 9 10 11 12 Ri nt/imports -monnths Rint/Foreign Debt Service (%) 8 1995 2000 2005 2010 1995 2000 2005 2010 1995 2000 2005 2010 Source: Central Bank ( Rint/M3 25 30 35 (%) 40 45
Foreign Debt (% of GDP) 50 Total 40 30 Public 0 10 20 Private 1990 1995 2000 2005 2010 Source: Central Bank
Interest rates Central Bank Policy Exchange rates International reserves Other measures
Other measures Capital controls (to short term capital inflows) adopted in may 2007 recently removed Reserve requirements Increased in may 2007 marginal reserve requirements converted recently to average reserve requirements reduced recently from 10% to 9% Exchange rate interventions recently removed